Vertiv Holdings Co. (NYSE:VRT) shares dropped more than 9% in pre-market trading on Wednesday after second-quarter revenue came in below Wall Street expectations, overshadowing stronger-than-expected earnings and an increase to the company’s full-year guidance.
The data centre infrastructure provider reported adjusted earnings of $1.52 per share for the quarter, ahead of analysts’ consensus estimate of $1.42. Revenue reached $3.27 billion, representing 18% organic growth from a year earlier, but missed market expectations of $3.37 billion.
Profitability Continues to Improve
Vertiv delivered another quarter of margin expansion, with adjusted operating profit increasing 51% year over year.
Adjusted operating margin improved by 410 basis points to 22.6%, reflecting continued operational efficiency and favourable business mix.
Chief Executive Officer Giordano Albertazzi said: “Demand for AI and general compute continues to intensify, and with each technology advancement, deployments grow more complex and more infrastructure-intensive.”
He added: “Our pipelines continue to strengthen as the market expands globally, giving us confidence to raise guidance and conviction in sustained, strong performance — this year and beyond.”
Third-Quarter Outlook Meets Expectations
For the third quarter, Vertiv forecast adjusted earnings per share of between $1.77 and $1.83, broadly in line with analysts’ consensus estimate of $1.79.
The company expects revenue to range between $3.65 billion and $3.85 billion, compared with market expectations of approximately $3.71 billion.
Vertiv also projected organic net sales growth of 34% to 36%, along with adjusted operating profit of between $898 million and $938 million. Adjusted operating margin is expected to be in the range of 24% to 25%.
Company Raises Full-Year Guidance
Despite the revenue miss in the second quarter, Vertiv increased its financial outlook for the full year.
The company now expects adjusted earnings per share of between $6.65 and $6.75, up from its previous guidance of $6.30 to $6.40 and above analysts’ consensus estimate of $6.48.
Full-year revenue is now forecast to be between $13.8 billion and $14.2 billion, compared with the previous range of $13.5 billion to $14.0 billion. The updated outlook is also ahead of the consensus estimate of $13.89 billion.
Vertiv expects full-year organic net sales growth of between 30% and 32%, while adjusted operating profit is projected to be in the range of $3.29 billion to $3.37 billion. The company also forecasts an adjusted operating margin of between 23.3% and 24.3%.
Vertiv Holdings stock price
