Why Electrical Equipment Company Vertiv Shares Are Tumbling Premarket Wednesday

Vertiv Holdings VRT shares are declining premarket today after the company reported fourth-quarter FY23 results.

Net sales rose 13% Y/Y to $1.865 billion, missing the consensus of $1.885 billion. Organic orders rose 23% Y/Y in the quarter, with a backlog of $5.5 billion at the end of the year.

Adjusted operating profit grew 57% Y/Y to $330 million, and adjusted operating margin expanded 500 basis points Y/Y to 17.7%, aided by benefits from commercial execution, higher volume, and improved productivity.

Adjusted EPS of $0.56 beat the consensus of $0.53.

Operating cash flow came in at $356 million, and adjusted free cash flow was $305 million in the quarter.

Outlook: Vertiv Holdings sees first-quarter revenue of $1.575 billion-$1.625 billion vs $1.62 billion estimate and adjusted EPS of $0.32-$0.36 (vs. consensus $0.37).

The company expects FY24 revenue of $7.515 billion-$7.655 billion vs. street view of $7.54 billion and adjusted EPS of $2.20-$2.26 compared to estimates of $2.24.

Giordano Albertazzi, Vertiv’s Chief Executive Officer, said, “We see tremendous opportunity ahead as the data center needs of AI drive additional market demand. Our fourth quarter acquisition of CoolTera and our continued commitment to supporting our customers reinforce our strong position in liquid cooling for high-density compute applications driven by AI demand.”

Price Action: VRT shares are down 13.45% at $53.68 premarket on the last check Wednesday.