Hubbell Inc. (NYSE:HUBB)

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Hubbell Inc., Financial Data: Reported vs. Adjusted

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Adjustment to Inventories, Net
Inventories, net at LIFO (as reported)	740,700)	662,100)	607,300)	633,000)	651,000)
Add: Inventory LIFO reserve	187,000)	136,900)	87,300)	89,800)	81,800)
Inventories, net at FIFO (adjusted)	927,700)	799,000)	694,600)	722,800)	732,800)
Adjustment to Current Assets
Current assets (as reported)	2,021,400)	1,879,300)	1,587,600)	1,574,200)	1,643,700)
Add: Inventory LIFO reserve	187,000)	136,900)	87,300)	89,800)	81,800)
Current assets (adjusted)	2,208,400)	2,016,200)	1,674,900)	1,664,000)	1,725,500)
Adjustment to Total Assets
Total assets (as reported)	5,402,600)	5,281,500)	5,085,100)	4,903,000)	4,872,100)
Add: Inventory LIFO reserve	187,000)	136,900)	87,300)	89,800)	81,800)
Total assets (adjusted)	5,589,600)	5,418,400)	5,172,400)	4,992,800)	4,953,900)
Adjustment to Total Hubbell Incorporated Shareholders’ Equity
Total Hubbell Incorporated shareholders’ equity (as reported)	2,360,900)	2,229,800)	2,070,000)	1,947,100)	1,780,600)
Add: Inventory LIFO reserve	187,000)	136,900)	87,300)	89,800)	81,800)
Total Hubbell Incorporated shareholders’ equity (adjusted)	2,547,900)	2,366,700)	2,157,300)	2,036,900)	1,862,400)
Adjustment to Net Income Attributable To Hubbell Incorporated
Net income attributable to Hubbell Incorporated (as reported)	545,900)	399,500)	351,200)	400,900)	360,200)
Add: Increase (decrease) in inventory LIFO reserve	50,100)	56,800)	(2,500)	8,000)	20,200)
Net income attributable to Hubbell Incorporated (adjusted)	596,000)	456,300)	348,700)	408,900)	380,400)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The conversion of inventory valuation from the Last-In, First-Out (LIFO) method to the First-In, First-Out (FIFO) method results in a systemic increase across key balance sheet and income statement metrics. This adjustment reflects the LIFO reserve, which represents the cumulative difference between the current replacement cost of inventory and its historical cost. A widening gap between reported and adjusted values over the five-year period indicates an environment of rising inventory costs.

Inventory Valuation Trends: Reported inventories exhibited a slight decline from 2018 to 2020 before increasing significantly in 2021 and 2022. However, the adjusted FIFO values remained consistently higher. The variance between reported and adjusted inventory, known as the LIFO reserve, grew from 81.8 million USD in 2018 to 187.0 million USD by 2022. This acceleration in the reserve, particularly between 2020 and 2022, suggests substantial inflationary pressure on the cost of goods.
Impact on Asset and Equity Position: The shift to FIFO valuation leads to a proportional increase in both current assets and total assets. Current assets rose from a reported 1.64 billion USD in 2018 to 2.02 billion USD in 2022, while the adjusted figures rose from 1.73 billion USD to 2.21 billion USD over the same period. Similarly, total assets saw a steady upward trajectory, with the adjusted total assets exceeding reported values by approximately 187 million USD by the end of 2022. This adjustment directly enhances the shareholders' equity, which increased from a reported 1.78 billion USD in 2018 to 2.36 billion USD in 2022, while the adjusted equity reached 2.55 billion USD in 2022.
Net Income Variations: Adjusted net income generally exceeds reported net income, a typical outcome of FIFO accounting during inflationary periods. While the difference was relatively modest between 2018 and 2020, a more pronounced divergence occurred in 2021 and 2022. In 2021, adjusted net income was 56.8 million USD higher than reported, and in 2022, it was 50.1 million USD higher. This pattern confirms that the FIFO method recognizes lower costs of goods sold when prices are rising, thereby inflating the reported bottom line compared to the LIFO method.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

Hubbell Inc., Financial Ratios: Reported vs. Adjusted

Hubbell Inc., adjusted financial ratios

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Current Ratio
Reported current ratio (LIFO)	1.86	1.76	1.67	1.86	1.96
Adjusted current ratio (FIFO)	2.03	1.89	1.77	1.97	2.06
Net Profit Margin
Reported net profit margin (LIFO)	11.03%	9.53%	8.39%	8.73%	8.04%
Adjusted net profit margin (FIFO)	12.05%	10.88%	8.33%	8.91%	8.49%
Total Asset Turnover
Reported total asset turnover (LIFO)	0.92	0.79	0.82	0.94	0.92
Adjusted total asset turnover (FIFO)	0.89	0.77	0.81	0.92	0.90
Financial Leverage
Reported financial leverage (LIFO)	2.29	2.37	2.46	2.52	2.74
Adjusted financial leverage (FIFO)	2.19	2.29	2.40	2.45	2.66
Return on Equity (ROE)
Reported ROE (LIFO)	23.12%	17.92%	16.97%	20.59%	20.23%
Adjusted ROE (FIFO)	23.39%	19.28%	16.16%	20.07%	20.43%
Return on Assets (ROA)
Reported ROA (LIFO)	10.10%	7.56%	6.91%	8.18%	7.39%
Adjusted ROA (FIFO)	10.66%	8.42%	6.74%	8.19%	7.68%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

An analysis of the adjusted financial ratios reveals a consistent divergence between reported LIFO-based figures and FIFO-adjusted values from 2018 through 2022. The adjustments generally indicate a stronger balance sheet and higher profitability than those reflected in the reported figures, although efficiency metrics are negatively impacted by the increased asset valuation.

Liquidity and Solvency: The adjusted current ratio remained consistently higher than the reported ratio throughout the five-year period, peaking at 2.03 in 2022. This suggests that the LIFO reserve significantly enhances the valuation of current assets. Similarly, adjusted financial leverage is consistently lower than reported leverage, decreasing from 2.66 in 2018 to 2.19 in 2022, which indicates a more robust equity position when adjusted for inventory valuation.
Profitability Margins: Net profit margins exhibited an overall upward trend. The adjusted net profit margin exceeded the reported margin in almost every period, with the gap widening significantly in 2021 and 2022. By December 31, 2022, the adjusted net profit margin reached 12.05% compared to the reported 11.03%, reflecting the impact of lower cost of goods sold under a FIFO assumption during periods of rising prices.
Asset Efficiency: Total asset turnover shows a consistent inverse relationship compared to other metrics, with adjusted ratios remaining lower than reported ratios. This is attributed to the increase in the total asset base resulting from the LIFO adjustment, which mathematically reduces the turnover ratio. Both reported and adjusted turnover ratios experienced a dip in 2020 before recovering in 2022.
Return on Investment: Both Return on Equity (ROE) and Return on Assets (ROA) showed a V-shaped recovery, dipping in 2020 and rising sharply through 2022. Adjusted ROA grew from 7.68% in 2018 to 10.66% in 2022, consistently tracking higher than the reported ROA except for a slight inversion in 2020. Adjusted ROE followed a similar trajectory, ending the period at 23.39%, which is higher than the reported 23.12%.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Current assets	2,021,400)	1,879,300)	1,587,600)	1,574,200)	1,643,700)
Current liabilities	1,088,500)	1,065,200)	948,200)	844,900)	839,300)
Liquidity Ratio
Current ratio¹	1.86	1.76	1.67	1.86	1.96
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted current assets	2,208,400)	2,016,200)	1,674,900)	1,664,000)	1,725,500)
Current liabilities	1,088,500)	1,065,200)	948,200)	844,900)	839,300)
Liquidity Ratio
Adjusted current ratio²	2.03	1.89	1.77	1.97	2.06

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Current ratio = Current assets ÷ Current liabilities
= 2,021,400 ÷ 1,088,500 = 1.86

² Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 2,208,400 ÷ 1,088,500 = 2.03

The liquidity profile between 2018 and 2022 reflects a period of moderate contraction followed by a sustained recovery in both asset levels and solvency ratios. Current assets experienced a decline through 2019, reached a trough in 2020, and subsequently expanded to peak levels in 2022.

Current Asset Trends: Reported current assets decreased from 1,643,700 thousand US$ in 2018 to 1,574,200 thousand US$ in 2019, before growing steadily to 2,021,400 thousand US$ by December 31, 2022. Adjusted current assets followed a nearly identical trajectory, ending the period at 2,208,400 thousand US$, indicating a consistent growth pattern in the company's short-term resource base following the 2019 decline.
Current Ratio Performance: The reported current ratio exhibited a downward trend from 1.96 in 2018 to a minimum of 1.67 in 2020. A recovery phase followed, with the ratio increasing to 1.76 in 2021 and reaching 1.86 in 2022. The adjusted current ratio mirrors this movement, falling from 2.06 in 2018 to 1.77 in 2020, before ascending to 2.03 by the end of 2022.
Analysis of Adjustments: A persistent positive variance is observed between reported and adjusted figures. The adjusted current ratio consistently remains higher than the reported ratio for every year analyzed. This suggests that the adjustments made to the current assets enhance the perceived liquidity position, providing a more favorable representation of the company's ability to cover short-term obligations compared to the reported figures.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Hubbell Incorporated	545,900)	399,500)	351,200)	400,900)	360,200)
Net sales	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)
Profitability Ratio
Net profit margin¹	11.03%	9.53%	8.39%	8.73%	8.04%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Hubbell Incorporated	596,000)	456,300)	348,700)	408,900)	380,400)
Net sales	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)
Profitability Ratio
Adjusted net profit margin²	12.05%	10.88%	8.33%	8.91%	8.49%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Net profit margin = 100 × Net income attributable to Hubbell Incorporated ÷ Net sales
= 100 × 545,900 ÷ 4,947,900 = 11.03%

² Adjusted net profit margin = 100 × Adjusted net income attributable to Hubbell Incorporated ÷ Net sales
= 100 × 596,000 ÷ 4,947,900 = 12.05%

Analysis of profitability metrics indicates a general upward trajectory in both net income and profit margins over the five-year period ending December 31, 2022. Despite a temporary contraction in 2020, there is a marked acceleration in profitability during the final two years of the period.

Adjusted Net Income Performance: Adjusted net income grew from 380.4 million US dollars in 2018 to 596.0 million US dollars in 2022. A decline was observed in 2020, with income dropping to 348.7 million US dollars, before recovering sharply to 456.3 million US dollars in 2021 and reaching its peak in 2022.
Adjusted Net Profit Margin Trends: The adjusted net profit margin exhibits a strengthening trend, increasing from 8.49% in 2018 to 12.05% in 2022. The most significant expansion occurred between 2020 and 2022, during which the margin rose from 8.33% to 12.05%, suggesting enhanced operational efficiency or improved pricing strategies.
Comparison of Reported and Adjusted Profitability: Adjusted metrics consistently trend higher than reported metrics in most years, particularly from 2021 onwards. In 2022, the adjusted net profit margin of 12.05% exceeded the reported margin of 11.03%, indicating that non-recurring items negatively impacted reported net income more than they did the adjusted figures.
Volatility and Recovery Patterns: A synchronized dip in both reported and adjusted net income and margins is evident in 2020. However, the subsequent recovery in 2021 and 2022 was more aggressive than the prior growth rates, with the adjusted net profit margin increasing by 255 basis points in 2021 alone.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net sales	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)
Total assets	5,402,600)	5,281,500)	5,085,100)	4,903,000)	4,872,100)
Activity Ratio
Total asset turnover¹	0.92	0.79	0.82	0.94	0.92
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Net sales	4,947,900)	4,194,100)	4,186,000)	4,591,000)	4,481,700)
Adjusted total assets	5,589,600)	5,418,400)	5,172,400)	4,992,800)	4,953,900)
Activity Ratio
Adjusted total asset turnover²	0.89	0.77	0.81	0.92	0.90

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Total asset turnover = Net sales ÷ Total assets
= 4,947,900 ÷ 5,402,600 = 0.92

² Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 4,947,900 ÷ 5,589,600 = 0.89

An examination of the financial metrics from 2018 to 2022 reveals a consistent expansion of the asset base coupled with fluctuating asset utilization efficiency. While total assets grew steadily over the five-year period, the ability to generate revenue from those assets experienced a notable decline before recovering in the final year of the sequence.

Asset Base Expansion: Both reported and adjusted total assets demonstrate a continuous upward trajectory. Reported total assets increased from 4,872,100 thousand US dollars in 2018 to 5,402,600 thousand US dollars by 2022. Similarly, adjusted total assets rose from 4,953,900 thousand US dollars to 5,589,600 thousand US dollars over the same timeframe, indicating a sustained investment in the company's resource base.
Adjusted Total Asset Turnover Trends: The adjusted total asset turnover ratio exhibits a U-shaped pattern. After a slight increase from 0.90 in 2018 to 0.92 in 2019, the ratio declined for two consecutive years, reaching a low of 0.77 in 2021. However, a significant recovery occurred in 2022, with the ratio rising to 0.89, nearly returning to the initial 2018 levels.
Operational Efficiency Analysis: The divergence between the steady growth in assets and the volatility of the turnover ratio suggests a period of reduced operational efficiency between 2020 and 2021. During this interval, the growth in the asset base likely outpaced revenue generation, resulting in a lower turnover rate. The sharp rebound in 2022 indicates a successful alignment of revenue growth with the expanded asset base, restoring asset productivity to near-historical norms.
Reported versus Adjusted Metrics: A consistent gap exists between reported and adjusted turnover ratios, with adjusted figures remaining lower across all periods. This indicates that the adjustments made to the total asset base consistently increase the denominator, thereby marginally reducing the resulting turnover ratio compared to the reported figures.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Total assets	5,402,600)	5,281,500)	5,085,100)	4,903,000)	4,872,100)
Total Hubbell Incorporated shareholders’ equity	2,360,900)	2,229,800)	2,070,000)	1,947,100)	1,780,600)
Solvency Ratio
Financial leverage¹	2.29	2.37	2.46	2.52	2.74
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted total assets	5,589,600)	5,418,400)	5,172,400)	4,992,800)	4,953,900)
Adjusted total Hubbell Incorporated shareholders’ equity	2,547,900)	2,366,700)	2,157,300)	2,036,900)	1,862,400)
Solvency Ratio
Adjusted financial leverage²	2.19	2.29	2.40	2.45	2.66

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ Financial leverage = Total assets ÷ Total Hubbell Incorporated shareholders’ equity
= 5,402,600 ÷ 2,360,900 = 2.29

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Hubbell Incorporated shareholders’ equity
= 5,589,600 ÷ 2,547,900 = 2.19

A consistent reduction in financial leverage is observed between 2018 and 2022, reflecting a steady strengthening of the capital structure. This trend is characterized by simultaneous growth in both total assets and shareholders' equity, with the growth in equity outpacing the expansion of the asset base over the five-year period.

Asset Expansion: Reported total assets increased from 4,872,100 thousand USD in 2018 to 5,402,600 thousand USD in 2022. Adjusted total assets followed a similar upward trajectory, rising from 4,953,900 thousand USD to 5,589,600 thousand USD. This indicates a sustained increase in the company's resource base.
Equity Growth: Shareholders' equity demonstrated consistent annual growth. Reported equity rose from 1,780,600 thousand USD to 2,360,900 thousand USD, while adjusted equity grew from 1,862,400 thousand USD to 2,547,900 thousand USD. The growth in equity has served as the primary driver for the reduction in leverage ratios.
Financial Leverage Analysis: The reported financial leverage ratio decreased monotonically from 2.74 in 2018 to 2.29 in 2022. The adjusted financial leverage ratio exhibited a similar decline, starting at 2.66 in 2018 and ending at 2.19 in 2022. The adjusted leverage remains consistently lower than the reported leverage across all periods, suggesting that the applied adjustments provide a more favorable view of the entity's solvency and risk profile.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Hubbell Incorporated	545,900)	399,500)	351,200)	400,900)	360,200)
Total Hubbell Incorporated shareholders’ equity	2,360,900)	2,229,800)	2,070,000)	1,947,100)	1,780,600)
Profitability Ratio
ROE¹	23.12%	17.92%	16.97%	20.59%	20.23%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Hubbell Incorporated	596,000)	456,300)	348,700)	408,900)	380,400)
Adjusted total Hubbell Incorporated shareholders’ equity	2,547,900)	2,366,700)	2,157,300)	2,036,900)	1,862,400)
Profitability Ratio
Adjusted ROE²	23.39%	19.28%	16.16%	20.07%	20.43%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROE = 100 × Net income attributable to Hubbell Incorporated ÷ Total Hubbell Incorporated shareholders’ equity
= 100 × 545,900 ÷ 2,360,900 = 23.12%

² Adjusted ROE = 100 × Adjusted net income attributable to Hubbell Incorporated ÷ Adjusted total Hubbell Incorporated shareholders’ equity
= 100 × 596,000 ÷ 2,547,900 = 23.39%

The financial performance between 2018 and 2022 is characterized by consistent growth in the capital base and a volatile but ultimately upward trajectory in profitability. While a notable contraction in returns occurred in 2020, the period concluded with a significant surge in both net income and return on equity, reaching five-year peaks in 2022.

Net Income Trajectory: Reported net income grew from US$ 360.2 million in 2018 to US$ 545.9 million in 2022. A temporary decline was observed in 2020, where income dropped to US$ 351.2 million before recovering strongly. Adjusted net income followed a similar pattern but demonstrated a more aggressive expansion in the final two years, increasing from US$ 456.3 million in 2021 to US$ 596.0 million in 2022.
Shareholders' Equity Expansion: A steady upward trend is observed in the company's equity position. Reported shareholders' equity increased linearly from US$ 1.78 billion in 2018 to US$ 2.36 billion in 2022. Similarly, adjusted shareholders' equity rose from US$ 1.86 billion to US$ 2.55 billion over the same period, indicating a consistent accumulation of capital.
Return on Equity (ROE) Performance: ROE exhibited a U-shaped trend over the five-year horizon. Reported ROE started at 20.23% in 2018, peaked slightly in 2019 at 20.59%, and reached a trough of 16.97% in 2020. A strong recovery followed, culminating in a high of 23.12% by the end of 2022. The adjusted ROE mirrored this movement, falling to 16.16% in 2020 before climbing to 23.39% in 2022.
Comparative Analysis of Reported and Adjusted Metrics: The divergence between reported and adjusted figures widened in the latter part of the period. While reported and adjusted ROE were nearly identical between 2018 and 2020, the adjusted ROE became more favorable than the reported ROE in 2021 and 2022. This indicates that the adjustments made to net income had a more significant positive impact on the return ratio than the corresponding adjustments to shareholders' equity during the recovery phase.

AI Ask an analyst for more

Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.

How can I help you?

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
As Reported
Selected Financial Data (US$ in thousands)
Net income attributable to Hubbell Incorporated	545,900)	399,500)	351,200)	400,900)	360,200)
Total assets	5,402,600)	5,281,500)	5,085,100)	4,903,000)	4,872,100)
Profitability Ratio
ROA¹	10.10%	7.56%	6.91%	8.18%	7.39%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in thousands)
Adjusted net income attributable to Hubbell Incorporated	596,000)	456,300)	348,700)	408,900)	380,400)
Adjusted total assets	5,589,600)	5,418,400)	5,172,400)	4,992,800)	4,953,900)
Profitability Ratio
Adjusted ROA²	10.66%	8.42%	6.74%	8.19%	7.68%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

2022 Calculations

¹ ROA = 100 × Net income attributable to Hubbell Incorporated ÷ Total assets
= 100 × 545,900 ÷ 5,402,600 = 10.10%

² Adjusted ROA = 100 × Adjusted net income attributable to Hubbell Incorporated ÷ Adjusted total assets
= 100 × 596,000 ÷ 5,589,600 = 10.66%

The financial performance from 2018 through 2022 reflects a general upward trajectory in profitability and asset efficiency, despite a period of volatility in 2020. While total assets grew steadily over the five-year period, the growth in net income accelerated more rapidly toward the end of the timeframe, resulting in a significant expansion of the return on assets.

Net Income Trends: Adjusted net income grew from 380,400 thousand US$ in 2018 to 596,000 thousand US$ in 2022. A notable contraction occurred in 2020, where adjusted net income fell to 348,700 thousand US$, before rebounding strongly in 2021 and 2022. The most significant year-over-year increase occurred between 2021 and 2022, where adjusted net income rose by approximately 30.6%.
Asset Base Evolution: Adjusted total assets exhibited a consistent linear increase, rising from 4,953,900 thousand US$ in 2018 to 5,589,600 thousand US$ in 2022. This represents a total asset base expansion of approximately 12.8% over the period, suggesting a controlled increase in resources to support operational growth.
Adjusted Return on Assets (ROA) Analysis: The adjusted ROA fluctuated between 2018 and 2020, reaching a period low of 6.74% in 2020. This decline coincides with the dip in adjusted net income during the same year. Following 2020, a sharp recovery is observed, with the ratio increasing to 8.42% in 2021 and peaking at 10.66% in 2022. This indicates that the growth in profitability significantly outpaced the growth in the asset base in the final two years.
Comparative Analysis of Reported vs. Adjusted Metrics: Adjusted ROA consistently remained higher than reported ROA from 2020 onward. The divergence became most pronounced in 2022, where the adjusted ROA of 10.66% exceeded the reported ROA of 10.10%. This suggests that adjustments for non-recurring or non-operational items had a positive impact on the perceived efficiency of asset utilization.

AI Ask an analyst for more