NEW YORK - Vertiv Holdings Co. (NYSE:VRT) reported a robust first quarter, with earnings surpassing analyst expectations and revenue showing a healthy increase from the previous year.
The company's adjusted earnings per share (EPS) for the first quarter came in at $0.43, which was $0.07 higher than the analyst consensus of $0.36. Revenue for the quarter reached $1.64 billion, exceeding the consensus estimate of $1.62 billion and marking an 8% increase from the first quarter of 2023.
Following the earnings release, Vertiv's stock price soared by more than 17%, indicating a strong positive market response to the company's earnings and future outlook.
The company's strong performance is reflected in its organic orders, which surged 60% compared to the same period last year, and a book-to-bill ratio of 1.5x. Additionally, Vertiv ended the quarter with a record high backlog of $6.3 billion.
The company also demonstrated an aggressive capital deployment strategy, repurchasing approximately 9.1 million shares for $600 million at a weighted average price of $66 per share.
In light of these results, Vertiv has raised its full-year 2024 guidance. The company now expects net sales growth of 12% at the midpoint, with operating profit projected between $1,150 million and $1,200 million and adjusted operating profit anticipated to be in the range of $1,325 million to $1,375 million.
This represents a significant 28% increase at the midpoint compared to the full year 2023.
For the second quarter of 2024, Vertiv forecasts an EPS range of $0.53 to $0.57, which brackets the analyst consensus of $0.55. Revenue guidance for Q2 is set between $1.9 billion and $1.95 billion, with the midpoint slightly above the consensus estimate of $1.9 billion.
For the full year, the company expects EPS to be between $2.29 and $2.35, compared to the consensus of $2.30, and revenue to range from $7.54 billion to $7.69 billion, with the midpoint just below the consensus of $7.63 billion.
The CEO attributed the quarter's success to the company's strategic focus and operational execution, which have positioned Vertiv for sustained growth.
Investors seem to be responding with optimism to the company's performance and prospects, as evidenced by the significant uptick in the share price. Vertiv's forward-looking stance and financial results underscore the company's strong market position and potential for continued expansion.
"FY24 upward revisions will be largely as expected but the much stronger backlog provides incremental support for the growth inflection that is embedded in the valuation for 2H24 and FY25," Wolfe Research analysts said in a note.
"We would expect the stock to trade strong, following recent weakness."
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