Vertiv Reports Strong Q3 Results, Raises 2024 Forecast Amid AI-Driven Demand
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Vertiv shares fall despite annual sales forecast hike, Q3 results beat By Investing.com
Investing.com -- Vertiv Holdings (NYSE:VRT) hiked its sales forecast for fiscal 2024 and topped expectations for Q3 results, though its shares still fell around 4% in premarket trading Wednesday. For the fiscal Q3 2024, provider infrastructure and services for data centers posted Q3 earnings per share (EPS) of $0.76, beating consensus estimates of $0.69. Revenue for the period stood at $2.07 billion, also above the $1.98 billion projected by analysts. In the Americas, net sales totaled $1.20 billion, surpassing the estimated $1.15 billion. The company's adjusted operating margin was 20.1%, slightly above the forecasted 19.9%. "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 unrelenting focus on strong operational execution and Vertiv's unique market position in enabling artificial intelligence and other critical applications for the data center," said Giordano Albertazzi, Vertiv's CEO. "There are clear indications of an acceleration in AI development that is truly encouraging, and which is driving demand across our entire AI-enabling portfolio of power, thermal, IT systems, infrastructure solutions and services." For the fourth quarter of 2024, Vertiv expects EPS to range between $0.80 and $0.84, higher than the consensus estimate of $0.75. Revenue is projected to be between $2.115 billion and $2.165 billion, compared to the market estimate of $2.15 billion. Looking further ahead, Vertiv forecasts 2024 EPS between $2.66 and $2.70, beating the consensus of $2.49. The company expects net sales to be between $7.78 billion and $7.83 billion, up from the previous range of $7.59 billion to $7.74 billion, and above the estimated $7.73 billion.
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Strong Q3 For Vertiv: Revenue Rises 19%, But Stock Takes A Hit - Vertiv Hldgs (NYSE:VRT)
For FY24, Vertiv raised its revenue guidance to $7.78B-$7.83B and adjusted EPS to $2.66-$2.70. Vertiv Holdings Co VRT shares are trading lower after the company reported third-quarter results. Net sales rose 19% year-over-year to $2.074 billion, beating the consensus of $1.977 billion. Organic orders (excluding foreign exchange) rose 17%. Adjusted operating profit surged 41% to $417 million, with the margin expanding 310 basis points to 20.1%, driven by higher volumes and favorable commercial execution. Adjusted EPS stood at $0.76, beating the consensus of $0.69. Operating cash flow reached $375 million, and adjusted free cash flow stood at $336 million in the quarter. Liquidity stood at $1.5 billion with no borrowings under the ABL credit facility at the end of the quarter. 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 unrelenting focus on strong operational execution and Vertiv's unique market position in enabling artificial intelligence and other critical applications for the data center." "We are very encouraged by the acceleration of liquid cooling revenue, which is a visible contributor to our third quarter results, despite a yet immature market. Pipelines continue to grow." Outlook: For FY24, Vertiv raised guidance for revenue to $7.78 billion - $7.83 billion (from $7.59 billion - $7.74 billion earlier) vs. consensus of $7.725 billion and adjusted EPS 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 (vs. $1.88 billion estimate) and adjusted EPS of $0.80 - $0.84 (vs. consensus of $0.61). The company projects organic sales growth for 2025 to accelerate beyond the 14% growth seen in 2024. Investors can gain exposure to the stock via TCW Transform Systems ETF NETZ and Professionally Managed Portfolios Otter Creek Focus Strategy ETF OCFS. Price Action: VRT shares are down 7.63% at $103.89 premarket at the last check Wednesday. Photo: courtesy Vertiv Read Next: Jim Cramer Labels Moderna A 'Big Disappointment,' But Suggests Doubling Down On Another Pharma Powerhouse Market News and Data brought to you by Benzinga APIs
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Vertiv Holdings, a provider of data center infrastructure, reported better-than-expected Q3 results and raised its 2024 forecast, citing strong demand for AI-enabling technologies. Despite positive results, the company's stock fell in premarket trading.
Vertiv's Q3 Performance Exceeds Expectations
Vertiv Holdings Co (NYSE:VRT), a leading provider of critical digital infrastructure for data centers, has reported impressive third-quarter results for fiscal 2024. The company's performance surpassed analyst expectations, with earnings per share (EPS) of $0.76, beating the consensus estimate of $0.69 1. Revenue for the period stood at $2.07 billion, also exceeding the projected $1.98 billion 1.
Strong Regional Performance and Margin Improvement
In the Americas, Vertiv's net sales totaled $1.20 billion, surpassing the estimated $1.15 billion 1. The company's adjusted operating margin reached 20.1%, slightly above the forecasted 19.9% 1. This performance demonstrates Vertiv's ability to execute operationally while meeting growing demand.
AI-Driven Demand Fuels Growth
Giordano Albertazzi, Vertiv's CEO, attributed the strong performance to robust underlying demand for the company's critical digital infrastructure products and services. He highlighted Vertiv's unique market position in enabling artificial intelligence and other critical applications for data centers 12. The acceleration in AI development is driving demand across Vertiv's entire AI-enabling portfolio, including power, thermal, IT systems, infrastructure solutions, and services 1.
Liquid Cooling Revenue Acceleration
Vertiv reported a notable acceleration in liquid cooling revenue, which contributed visibly to the third-quarter results. The company sees this as an encouraging sign, despite the market for liquid cooling still being in its early stages. Pipelines for this technology continue to grow, indicating potential for future expansion 2.
Raised Guidance for Fiscal Year 2024
Following the strong Q3 results, Vertiv has raised its guidance for the fiscal year 2024. The company now expects:
- Net sales between $7.78 billion and $7.83 billion, up from the previous range of $7.59 billion to $7.74 billion 12.
- Adjusted EPS between $2.66 and $2.70, beating the consensus of $2.49 12.
For the fourth quarter of 2024, Vertiv projects EPS to range between $0.80 and $0.84, higher than the consensus estimate of $0.75. Revenue is expected to be between $2.115 billion and $2.165 billion 12.
Looking Ahead to 2025
Vertiv is optimistic about its future growth prospects. The company projects organic sales growth for 2025 to accelerate beyond the 14% growth seen in 2024 2. This forecast suggests continued strong demand for Vertiv's products and services in the coming years.
Stock Performance
Despite the positive results and raised guidance, Vertiv's shares fell approximately 4% in premarket trading 1. As of the last check on Wednesday, VRT shares were down 7.63% at $103.89 in premarket trading 2. This decline in stock price, despite strong performance, may indicate that investors had even higher expectations or are reacting to other market factors.
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