Hubbell Inc. (NASDAQ:HUBA) Q2 2015 Earnings Conference Call - Final Transcript
Jul 23, 2015 • 10:00 am ET
Okay. Thanks Bill. I'm on page 18. First let's talk about our view of the end markets for the rest of the year. I think there's a lot of consistency to what we saw as we reported after the first quarter, but with a few changes. I think you know, starting with the Utility side, that's going to continue, we think, to show slight growth with the Telecommunications side, helping to support that. The residential market, we think is going to be a little bit lighter than we thought three months ago.
I think that's consistent with some of the third-party forecasts that we've seen, although they haven't come down all that much. But remember that we were probably on the high end of where some of them started. And so you know, I think that's certainly there are signs of activity that will bode well for next year, when you look at permits, but certainly not going to impact our volume in the second half of this year to any great degree.
The nonresidential market continues to be solid, maintaining our outlook that at 5% to 6%, although to be clear, there's certainly a lot of diversity in that market. As Bill reported, our Commercial Construction business up double digits and the commercial side of nonresidential, very strong. On some of the industrial side, institutional, little weaker. And so, but on balance that 5% to 6% is still very solid. The industrial side is where we've seen most of the weakness throughout the year.
Recall we started the year with an assumption of that being up 3% to 5%. We saw some early weakness, and indicated that would be down 2% to 4%, and even subsequent to that, we saw even more weakness, and so our outlook now is more in the 0% to 2%. And I think, even there, there is diversity in that market, so it's not a case of every part of that market. In fact, some are very solid. You look at the auto activity, and that industrial space is still very solid.
Beside that is more impacted than you see it, and as market participants who are manufacturing the related products that support the oil and gas industry. Whether it's pumps, valves, flow goods, that's where there is a lot more weakness and where we're selling into those manufacturing industrial sectors, that's what we're seeing. So that's why we're at the 0% to 2% in Industrial. And then Harsh & Hazardous seems to, at least at this point, have stabilized for us to maintain our 20% to 25%.
Recall that we were out early at 15% to 20%, and then quickly saw that that wasn't adequate and moved it to 20% to 25%. Back in May, I think I spoke to some of you, spoke at some conferences, and we were concerned because we were seeing some of the order rates even drifting worse. I think that's stabilized and that certainly has been a positive