Hubbell, a U.S.-based manufacturer of electrical and utility infrastructure products, reported 5% organic sales growth in its Utility Solutions segment, driven by an 8% increase in grid infrastructure sales, while grid automation sales declined 4% amid a temporary shortage of metering components. The company said the increase reflects sustained demand from hyperscale and colocation operators building out computing capacity. [5]
Company officials said a temporary shortage of meter components should be fully resolved by the end of the year. CEO Gerben Bakker said the shortage stemmed from a contract manufacturer's inability to source a key component from a supplier.
Data Center Demand Exceeds Company Expectations
Capozzoli said data center sales exceeded the company's expectations for the year.
Hubbell said demand from light industrial and other nonresidential markets remained strong during the quarter. The 2025 acquisition of NSI Industries added another 29% increase on top of organic sales growth, according to the slides.
The results arrive as data center operators race to secure electrical infrastructure. Industry projections cited by NaturalNews.com suggest that AI-related infrastructure spending could exceed $5 trillion by 2030, with data center capacity demand reaching 100 gigawatts [1]. Transformer lead times for hyperscale facilities have stretched to five years or more, according to a BrightVideos.com commentary [2]. Hubbell's results indicate that at least one domestic equipment supplier is converting that demand into sales.
Utility Growth Tempered by Metering Shortage
Bakker said Utility Solutions organic sales rose 5% in the quarter. He attributed most of the decline in the grid automation division to slowing sales of substation control houses and a temporary shortage of metering equipment.
The shortage occurred when one of the company's contract manufacturers was unable to source a key component from a supplier, Bakker said.
The utility segment's performance comes amid broader strain on U.S. grid infrastructure. Natural News reported in July 2026 that AI data center expansion is encountering insufficient grid capacity, with utilities struggling to forecast actual demand as technology companies shop large projects across multiple regions [1][3]. Hubbell's grid infrastructure sales growth of 8% suggests utilities are continuing to invest in transmission and distribution equipment even as some automation categories soften.
Manufacturing Capacity to Double in 2027
Hubbell continues to invest about $25 million per quarter in additional manufacturing capacity and plans to double that to $50 million per quarter next year, Bakker said. The company expects to invest $200 million in new capacity in 2027, according to the earnings presentation.
Most expansions involve adding machines and assembly lines to existing factories, though the company has begun adding square footage to some existing factories. Bakker said, "You can only keep adding so many machines before you run out of roofline."
Capozzoli said the majority of the new capacity will serve transmission, substation and data center markets. The capacity buildout comes as electrical equipment manufacturers face pressure to shorten lead times. The BrightVideos.com commentary noted that transformer lead times for hyperscale data centers are currently five years or more, describing the physical infrastructure bottleneck as more severe than previously identified [2]. Hubbell's investment plans represent one supplier's response to that constraint.
Pricing Actions and Margin Outlook
Capozzoli said Hubbell continues to improve operating margins in line with a long-term effort to cut costs, despite ongoing expansion and rising inflation. The company has secured higher prices for its products in recent quarters, which it said has helped margins stay ahead of inflationary pressures when combined with growing demand and expanding productivity.
Capozzoli said Hubbell plans to implement 2027 price increases early, beginning this November, to address cost inflation and maintain the company's margins. The early timing of the increases is intended to keep pricing ahead of cost pressures before they fully materialize, he said.
The pricing strategy reflects conditions across the electrical equipment sector. Input costs have risen while demand from data centers and utilities remains elevated. In a July 2026 commentary, Natural News reported that U.S. companies are projected to spend $50 billion on coal- and natural gas-fired power generation in 2025, exceeding China's investment in the same fuels by $3 billion, according to the International Energy Agency as quoted by the Financial Times [4]. That spending supports demand for the transmission and distribution equipment Hubbell manufactures.
Outlook
Bakker said, "We continue to believe utility T&D markets are in the early stages of an attractive multiyear investment cycle, driven by aging infrastructure and bolstered by load growth and data center interconnections."
Hubbell reported net third-quarter sales in its utility segment of $1.03 billion, up 8.9 percent over last year, according to the earnings presentation.
The company's results and outlook place Hubbell among suppliers positioned to benefit from data center and grid investment, though the meter component shortage and grid automation decline indicate that not all product lines are expanding at the same rate. Hubbell's planned capacity additions and early pricing actions will be tested against supply chain constraints and inflation in the coming year, the company said.
References
- AI Data Center Expansion Faces Grid Constraints as Power Demand Surges - NaturalNews.com, July 01, 2026
- Bright Videos News - THE AI DATA CENTER BUBBLE WILL BURST - Mike Adams - BrightVideos.com, June 01, 2026.
- The AI power crunch: Grid realities collide with tech ambition - NaturalNews.com, December 04, 2025.
- U.S. Power Spending on Coal and Gas Set to Surpass China as Data Center Demand Drives $50 Billion Investment - NaturalNews.com, July 04, 2026.
- Data center purchases of electrical equipment up 80% since 2025: Hubbell. https://www.utilitydive.com/news/data-center-purchases-of-electrical-equipment-up-80-since-2025-hubbell/873134/
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