Powell Industries (NasdaqGS:POWL) Q4 2025 Earnings Call November 19, 2025 11:00 AM ET Company ParticipantsMike Metcalf - CFOBrett Cope - Chairman and CEORyan Coleman - Head of Investor RelationsConference Call ParticipantsChip Moore - AnalystJohn Braatz - AnalystJohn Franzreb - AnalystOperatorWelcome to the Powell Industries Earnings Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star then zero on your teleph ...

Enel Chile (NYSE:ENIC) Q3 2025 Earnings Call November 04, 2025 08:00 AM ET Speaker1Good morning, ladies and gentlemen, and welcome to Enel Chile Third Quarter and Nine Months 2025 Results Conference Call. My name is Carmen, and I will be your operator for today. During this conference call, we may make statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect only our current expectations, are not ...

Summary of Conference Call Company Overview - The company discussed is Hubbell, which has transitioned from being a GDP grower to targeting mid-single-digit through-cycle growth, driven by secular trends in electrical and utility sectors and portfolio high-grading [1][2][3]. Core Growth Insights - Over the last five years, Hubbell has achieved a compounded growth rate of 10% and a 20% compounded growth in earnings per share, indicating confidence in medium-term growth and margin expansion [2][4]. - The company anticipates 25% to 30% incrementals to help grow margins, aiming for 8% earnings per share growth, with a long-term expectation of mid-single-digit top-line growth [4][3]. Market Dynamics - The electrical distribution market is expected to grow at a low to mid-single-digit rate, while transmission and substation markets are projected to grow at double-digit rates, driven by demand from data centers [8][9][10]. - The smart meter segment has faced contraction but is expected to flatten and begin modest growth in the fourth quarter [11][12]. Utility Sector Insights - Utilities are committing to larger capital budgets, which is beneficial for Hubbell as it indicates increased spending on distribution, transmission, and substations [14][15]. - Load growth in the utility sector is seen as a positive indicator for Hubbell, although quantifying its impact on spending remains complex [16][17]. Portfolio Management - Hubbell has focused on high-grading its portfolio, reducing exposure to commercial and residential sectors while increasing focus on industrial and data center markets [19][18]. - The company has been actively acquiring businesses in high-growth, high-margin areas, particularly in the electrical segment [19][25]. Margin Expansion Strategy - Margin expansion has been achieved through portfolio management, restructuring, and increased capital investment, with CapEx now nearly double the historical levels [21][22]. - The strategy includes consolidating factories and streamlining operations to enhance productivity and efficiency [22]. Recent Acquisition - Hubbell announced the acquisition of DMC Power for $825 million, which is expected to contribute significantly to growth and profitability due to its high voltage transmission connector business [31][32]. - DMC Power is projected to grow at 20%, with a high margin due to its cost-effective technology [32][33]. Pricing Strategy - The company has successfully managed pricing in a high-inflation environment, with prices sticking well despite concerns about pricing fatigue [37][38]. - Communication with distributor partners has been crucial in maintaining price inelasticity [44]. Future Outlook - The order book for electric distribution is improving, leading to expectations of steady growth in the coming years [47]. - The company is optimistic about exiting the year with a healthier order book, setting a solid foundation for growth in 2026 and beyond [47].

Financial Performance - Record adjusted earnings per share of $2.95 in Q2 2025, up 8% versus 2Q24, with segment margins of 23.9%, up 20 bps versus 2Q24[4] - Sales reached $7.028 billion in 2Q 2025, an 11% increase compared to $6.350 billion in 2Q 2024[23] - Adjusted earnings increased by 5% from $1.096 billion in 2Q 2024 to $1.155 billion in 2Q 2025[23] Growth and Orders - Organic growth of 8%, driven by 12% growth in Electrical Americas, 11% in Aerospace and 7% in Electrical Global[4] - Electrical Americas data center orders are up approximately 55% and revenue up approximately 50% versus 2Q24[5] - Order acceleration in Electrical Americas up 2% and strong Aerospace growth up 10% on a rolling 12-month basis[4] Segment Performance - Electrical Americas sales increased by 16% to $3.350 billion in 2Q 2025 from $2.877 billion in 2Q 2024[24] - Aerospace sales increased by 13% to $1.080 billion in 2Q 2025 from $955 million in 2Q 2024[29] - Vehicle segment sales decreased by 8% to $663 million in 2Q 2025 from $723 million in 2Q 2024[31] Guidance and Outlook - Raising 2025 guidance for organic growth, segment margin and adjusted EPS at the midpoint[6] - Full year 2025 adjusted earnings per share guidance is $11.97 - $12.17 and organic growth is 8.5% - 9.5%[39] - Full year 2025 free cash flow guidance is $3.7 billion - $4.1 billion and share repurchases are $2.0 billion - $2.4 billion[39]

Investment Rating - The report maintains a "Buy" rating for Energisa, Equatorial, and Copel, while Cemig is rated as "Sell" [6][64][50]. Core Insights - The new power distribution opex methodology approved by the regulator aims to enhance efficiency sharing with consumers, impacting the fair equity values of the companies covered [7][21]. - Energisa and Equatorial are the most exposed to the new methodology, with estimated impacts of -9% and -8% on their fair equity values, respectively [2][8]. - Despite recent market rallies, the sector remains reasonably valued, with an average real spread of approximately 3.8% to Brazil's free risk bonds [3]. Summary by Sections New Opex Methodology - The new methodology includes annual updates to reference opex, a simplified benchmark model, and the application of the IPCA index for all variables [7][21]. - Cost outperformance sharing with consumers is now correlated to median sectoral efficiency, with limits set at 140%/60% for cost outperformance [21][28]. Company-Specific Adjustments - Energisa's fair equity value is adjusted down by -9% due to the new methodology and updated power demand forecasts, with a revised 2025E growth estimate of 0.5% YoY [49][50]. - Equatorial's fair equity value is adjusted down by -8%, with a similar revision in growth estimates to 0.5% YoY for 2025E [63][64]. - Copel is the least affected, with a -3% impact on fair equity value [2][8]. Market Demand and Forecasts - The report incorporates updated forecasts from Brazil's independent power system operator, indicating a decrease in power demand growth, with a -4% YoY drop noted in April and May 2025 [44][45]. - The overall demand forecast for 2025E has been revised down to -3.1% YoY from a previous estimate of +0.4% YoY [44][45].

Financial Data and Key Metrics Changes - In Q4 2024, the company reported an adjusted EBITDA of BRL 1.3 billion and a net income of almost BRL 600 million, with a full-year adjusted EBITDA of BRL 5.1 billion and net income of BRL 2.8 billion, nearly BRL 3 billion [7][10][34] - The adjusted EBITDA for Q4 2024 was 12% lower than the BRL 1.4 billion reported in Q4 2023, primarily due to a smaller sales mix at Copel GeT and increased curtailment [23][24] Business Line Data and Key Metrics Changes - Copel Distribuicao generated an EBITDA of BRL 715 million in Q4 2024, marking a 23.6% increase compared to the same period last year, driven by a 2.5% growth in the billed grid market and a 2.7% adjustment in TUSD [24][25] - Copel GeT reported an adjusted EBITDA of BRL 613 million, impacted by a BRL 93 million loss due to lower performance of wind complexes and curtailment [26][27] Market Data and Key Metrics Changes - The company experienced a curtailment of 13.1% in Q4 2024 compared to 8.3% in Q4 2023, affecting the performance of wind assets [23][26][88] - The trading segment closed the quarter with an adjusted EBITDA of negative BRL 15 million, reflecting lower trading margins due to price variations in submarkets [27] Company Strategy and Development Direction - The company aims to optimize its asset portfolio and simplify its operating structure through strategic asset swaps and divestments, including the sale of minority stakes [12][16][74] - Future focus includes completing the investment program for Copel Distribuicao, enhancing operational excellence, and pursuing opportunities in energy trading [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate value through disciplined capital allocation and a focus on operational excellence, despite challenges from curtailment and market volatility [11][17][78] - The company anticipates a positive outlook for 2025, with expectations of improved EBITDA driven by tariff cycle renewals and operational efficiencies [17][34][110] Other Important Information - The company proposed a total of BRL 2.3 billion in dividends for 2024, resulting in a payout ratio of 86% and a dividend yield of approximately 8.4% [10][34] - The company executed a historical CapEx focused on regulatory remuneration and service quality, with 88% of total investments directed towards Copel Distribuicao [34] Q&A Session Summary Question: Capital allocation and optimum capital structure - Management discussed the ongoing study to determine the optimum capital structure, emphasizing the importance of maintaining flexibility for future investments while optimizing short-term capital allocation [40][44][49] Question: Energy price scenario and liquidity - Management highlighted the ability to capitalize on higher energy prices, with trading volumes exceeding BRL 180 in Q4 2024, and noted no significant liquidity issues [53][54][56] Question: Timing for optimum capital structure study and capacity auction - Management plans to present the findings of the optimum capital structure study and new dividend policy in May, alongside the first quarter earnings call [61][62] Question: Regulatory discussions on curtailment - Management acknowledged ongoing discussions regarding curtailment and emphasized the need for regulatory adjustments to mitigate its impact [69][78] Question: Performance of wind assets - Management explained that the performance of wind assets was affected by curtailment and maintenance issues, but measures are being taken to address these challenges [85][88]