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Vertiv's (VRT) Q2 Earnings & Revenues Beat Estimates, Up Y/Y
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Vertiv Holdings (VRT - Free Report) reported second-quarter 2024 non-GAAP earnings of 67 cents per share, beating the Zacks Consensus Estimate by 13.56%. The figure jumped 45.7% year over year.
Net sales increased 12.6% year over year to $1.95 billion, surpassing the Zacks Consensus Estimate by 0.46%. Net sales on an organic basis increased 14% year over year.
Organic orders (excluding foreign exchange) surged 57% year over year, and the book-to-bill ratio was 1.4x in the second quarter.
The backlog at the end of the second quarter was $7 billion, up 47% year over year and 11% sequentially.
Vertiv Holdings Co. Price, Consensus and EPS Surprise
Product revenues (accounted for 79.6% of total revenues) increased 14.3% year over year to $1.56 billion. Service revenues (20.4% of total revenues) increased 6.4% year over year to $397.6 million.
Americas revenues increased 16.9% year over year (17.2% organic) to $1.12 billion and accounted for 57.4% of total revenues. Product revenues increased 18.7% year over year (19.5% organic) to $892.1 million. Service & spares revenues increased 10.1% (8.8% organic) to $229 million in the reported quarter.
APAC revenues increased 3.4% year over year (5.7% organic) to $409.1 million and accounted for 20.9% of total revenues. Product revenues increased 2.6% year over year (5% organic) to $293.1 million. Service & spares revenues increased 5.4% (7.4% organic) to $116 million in the reported quarter.
EMEA revenues increased 11.5% year over year (13.5% organic) to $422.6 million and accounted for 21.6% of total revenues. Product revenues increased 13.5% year over year (14.8% organic) to $332.1 million. Service & spares revenues increased 5% (9.2% organic) to $90.5 million in the second quarter of 2024.
Operating Details
Selling, general and administrative (SG&A) expenses increased 11.1% year over year to $363.8 million. As a percentage of sales, SG&A expenses decreased 30 basis points (bps) year over year to 18.6%.
Adjusted operating profit jumped 52% year over year to $381.8 million. The second-quarter non-GAAP operating margin was 19.6%, up 510 bps year over year.
Americas’ adjusted operating profit surged 48.7% year over year to $285.1 million. EMEA’s adjusted operating profit soared 37% to $109.5 million. However, APAC’s adjusted operating profit declined 15.4% year over year to $32.3 million.
Balance Sheet
As of Jun 30, 2024, cash, cash equivalents and marketable securities totaled $579.7 million compared with $275.8 million as of Mar 31, 2024.
Long-term debt at the end of the second quarter was $2.91 billion, down from $2.92 billion reported in the previous quarter.
Cash flow from operating activities was $378.4 million for the reported quarter, up from $137.5 million in the prior quarter. Free cash flow was $333.4 million for the second quarter.
Guidance Positive
For third-quarter 2024, revenues are expected between $1.94 billion and $1.99 billion. Organic net sales are expected in the 12-16% range.
The Zacks Consensus Estimate for revenues is pegged at $2.40 billion, indicating 1.99% growth year over year.
Vertiv expects adjusted operating profit between $375 million and $395 million. Operating margin is expected in the 19.4%-19.8% range
VRT expects third-quarter 2024 non-GAAP earnings between 65 cents per share and 69 cents per share. The Zacks Consensus Estimate for non-GAAP earnings is pegged at $5.65 per share, suggesting year-over-year growth of 4.63%.
For 2024, revenues are expected between $7.59 billion and $7.74 billion. Organic net sales are expected in the 12-14% range.
The Zacks Consensus Estimate for revenues is pegged at $2.40 billion, indicating 1.99% growth year over year.
Vertiv expects adjusted operating profit between $1.41 billion and $1.46 billion. Operating margin is expected in the 18.5-18.9% range.
VRT expects 2024 non-GAAP earnings between $2.47 per share and $2.53 per share. The Zacks Consensus Estimate for non-GAAP earnings is pegged at $5.65 per share, suggesting year-over-year growth of 4.63%.
Free cash flow for 2024 is expected between $850 million and $900 million.
Zacks Rank & Other Stocks to Consider
Currently, Vertiv carries a Zacks Rank #2 (Buy).
VRT shares were down 13.64% to close at $78.59 on Jul 24. The company’s shares have outperformed the Zacks Computer & Technology sector year to date. While Vertiv shares have gained 63.6%, the Computer & Technology sector has increased 18.7%.
Arista Networks (ANET - Free Report) , Apple (AAPL - Free Report) and Cognizant (CTSH - Free Report) are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
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Vertiv's (VRT) Q2 Earnings & Revenues Beat Estimates, Up Y/Y
Vertiv Holdings (VRT - Free Report) reported second-quarter 2024 non-GAAP earnings of 67 cents per share, beating the Zacks Consensus Estimate by 13.56%. The figure jumped 45.7% year over year.
Net sales increased 12.6% year over year to $1.95 billion, surpassing the Zacks Consensus Estimate by 0.46%. Net sales on an organic basis increased 14% year over year.
Organic orders (excluding foreign exchange) surged 57% year over year, and the book-to-bill ratio was 1.4x in the second quarter.
The backlog at the end of the second quarter was $7 billion, up 47% year over year and 11% sequentially.
Vertiv Holdings Co. Price, Consensus and EPS Surprise
Vertiv Holdings Co. price-consensus-eps-surprise-chart | Vertiv Holdings Co. Quote
Top Line Details
Product revenues (accounted for 79.6% of total revenues) increased 14.3% year over year to $1.56 billion. Service revenues (20.4% of total revenues) increased 6.4% year over year to $397.6 million.
Americas revenues increased 16.9% year over year (17.2% organic) to $1.12 billion and accounted for 57.4% of total revenues. Product revenues increased 18.7% year over year (19.5% organic) to $892.1 million. Service & spares revenues increased 10.1% (8.8% organic) to $229 million in the reported quarter.
APAC revenues increased 3.4% year over year (5.7% organic) to $409.1 million and accounted for 20.9% of total revenues. Product revenues increased 2.6% year over year (5% organic) to $293.1 million. Service & spares revenues increased 5.4% (7.4% organic) to $116 million in the reported quarter.
EMEA revenues increased 11.5% year over year (13.5% organic) to $422.6 million and accounted for 21.6% of total revenues. Product revenues increased 13.5% year over year (14.8% organic) to $332.1 million. Service & spares revenues increased 5% (9.2% organic) to $90.5 million in the second quarter of 2024.
Operating Details
Selling, general and administrative (SG&A) expenses increased 11.1% year over year to $363.8 million. As a percentage of sales, SG&A expenses decreased 30 basis points (bps) year over year to 18.6%.
Adjusted operating profit jumped 52% year over year to $381.8 million. The second-quarter non-GAAP operating margin was 19.6%, up 510 bps year over year.
Americas’ adjusted operating profit surged 48.7% year over year to $285.1 million. EMEA’s adjusted operating profit soared 37% to $109.5 million. However, APAC’s adjusted operating profit declined 15.4% year over year to $32.3 million.
Balance Sheet
As of Jun 30, 2024, cash, cash equivalents and marketable securities totaled $579.7 million compared with $275.8 million as of Mar 31, 2024.
Long-term debt at the end of the second quarter was $2.91 billion, down from $2.92 billion reported in the previous quarter.
Cash flow from operating activities was $378.4 million for the reported quarter, up from $137.5 million in the prior quarter. Free cash flow was $333.4 million for the second quarter.
Guidance Positive
For third-quarter 2024, revenues are expected between $1.94 billion and $1.99 billion. Organic net sales are expected in the 12-16% range.
The Zacks Consensus Estimate for revenues is pegged at $2.40 billion, indicating 1.99% growth year over year.
Vertiv expects adjusted operating profit between $375 million and $395 million. Operating margin is expected in the 19.4%-19.8% range
VRT expects third-quarter 2024 non-GAAP earnings between 65 cents per share and 69 cents per share. The Zacks Consensus Estimate for non-GAAP earnings is pegged at $5.65 per share, suggesting year-over-year growth of 4.63%.
For 2024, revenues are expected between $7.59 billion and $7.74 billion. Organic net sales are expected in the 12-14% range.
The Zacks Consensus Estimate for revenues is pegged at $2.40 billion, indicating 1.99% growth year over year.
Vertiv expects adjusted operating profit between $1.41 billion and $1.46 billion. Operating margin is expected in the 18.5-18.9% range.
VRT expects 2024 non-GAAP earnings between $2.47 per share and $2.53 per share. The Zacks Consensus Estimate for non-GAAP earnings is pegged at $5.65 per share, suggesting year-over-year growth of 4.63%.
Free cash flow for 2024 is expected between $850 million and $900 million.
Zacks Rank & Other Stocks to Consider
Currently, Vertiv carries a Zacks Rank #2 (Buy).
VRT shares were down 13.64% to close at $78.59 on Jul 24. The company’s shares have outperformed the Zacks Computer & Technology sector year to date. While Vertiv shares have gained 63.6%, the Computer & Technology sector has increased 18.7%.
Arista Networks (ANET - Free Report) , Apple (AAPL - Free Report) and Cognizant (CTSH - Free Report) are some other top-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector.
Arista Networks sports a Zacks Rank #1 (Strong Buy) at present, while Apple and Cognizant carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arista Networks’ shares have gained 38.4% year to date. ANET is set to report its second-quarter 2024 results on Jul 30.
Apple shares have gained 13.5% year to date. AAPL is set to report its third-quarter fiscal 2024 results on Aug 1.
Cognizant shares have declined 3.7% year to date. CTSH is set to report its second-quarter 2024 results on Jul 31.