Vertiv Holdings Co (NYSE:VRT) shares are trading lower after the company reported third-quarter results.
Net sales rose 19% year over year to $2.074 billion, surpassing the consensus of $1.977 billion. Organic orders (excluding foreign currency) increased by 17%.
Adjusted operating profit rose 41% to $417 million, with margin expanding 310 basis points to 20.1%, driven by higher volumes and favorable commercial execution.
Adjusted earnings per share were $0.76, better than the $0.69 consensus.
Operating cash flow was $375 million, and adjusted free cash flow was $336 million in the quarter. Liquidity at the end of the quarter was $1.5 billion, excluding borrowings under the ABL credit facility.
Giordano Albertazzi, Chief Executive Officer, said: “Vertiv’s strong performance in the third quarter was driven by robust underlying demand for our critical digital infrastructure products and services, our continued and unwavering focus on strong operational execution and the unique Vertiv’s market position in the field of enabling artificial intelligence. and other critical data center applications.”
“We are very encouraged by the acceleration of liquid cooling sales, which is making a visible contribution to our third quarter results, despite an immature market. The pipelines continue to grow.”
Outlook: For FY24, Vertiv raised revenue guidance to $7.78 billion – $7.83 billion (from $7.59 billion – $7.74 billion previously) versus consensus of $7.725 billion and adjusted earnings per share to $2.66 – $2.70 (from $2.47 – $2.53) vs. consensus of $2.49.
For the fourth quarter, Vertiv expects revenue of $2.115 billion – $2.165 billion (versus a $1.88 billion estimate) and adjusted earnings per share of $0.80 – $0.84 (versus a $0.61 consensus).
The company forecasts that organic revenue growth for 2025 will accelerate beyond 14% growth in 2024.
Investors can gain exposure to the stock through TCW Transform Systems ETF (NYSE:NETZ) and Professionally Managed Portfolios Otter Creek Focus Strategy ETF (NYSE:OCFS).
Price promotion: VRT shares are down 7.63% to $103.89 premarket at last check Wednesday.
Photo: Courtesy of Vertiv
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