Vertiv Stock Plunges After Q4 Results, Cites Inflationary, Supply Chain Pressures

Vertiv Holdings Co VRT reported fourth-quarter sales growth of 8% year-over-year to $1.41 billion and 3.9% on an organic basis, missing the consensus of $1.42 billion.
Sales by segments: Americas $583.9 million (+4.8% Y/Y), APAC $458.9 million (+3.8% Y/Y) and EMEA $367.7 million (+20% Y/Y).
The company recorded an operating loss of $(3.9) million, compared to a profit of $120 million a year ago.
Adjusted EPS of $0.04 missed the consensus of $0.28.
The company noted end-market demand remained strong in Q4, orders up 51% Y/Y and backlog of $3.2 billion (+73% Y/Y).
Vertiv generated an operating cash flow of $210.9 million in FY21, compared to $208.9 million a year ago. Free cash flow was $136.1 million.
“We started the first half strongly, but supply chain challenges and inflationary headwinds quickly put pressure on our operational and financial performance in the second half – notably in the fourth quarter,” said CEO Rob Johnson.
The company expects the pricing actions implemented at the end of 2021 and early 2022 to progressively show in its 2022 profitability, with each quarter sequentially better than the previous quarter.
1Q22 Guidance: Vertiv expects net sales of $1.1 billion - $1.15 billion vs. consensus of $1.27 billion; and Adjusted EPS loss of $(0.20) – $(0.15) vs. consensus of $0.23 .
FY22 Guidance: The company expects net sales of $5.5 billion - $5.8 billion vs. consensus of $5.73 billion, and adjusted EPS of $0.65 - $0.75 vs. consensus of $1.33.
It expects an adjusted operating profit of $500 million-$550 million and Free Cash Flow of $125 million - $175 million.
Price Action: VRT shares care trading lower by 32.6% at $13.19 during the premarket session on Wednesday.

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