What happened
Vertiv Holdings (VRT +3.52%) reported fourth-quarter numbers that missed expectations, but the company is optimistic about 2023. In an earnings season where investors are mostly focused on what lies ahead, that was enough to get investors excited, sending shares of Vertiv up as much as 17% on Wednesday morning.
So what
Vertiv is a provider of electronic equipment, analytics, and services for data centers. The company was carved out of Emerson Electric by private equity in 2016, and went public in 2020.
The company earned $0.28 per share in the fourth quarter on revenue of $1.66 billion, falling just short of the $0.31 per share earnings on revenue of $1.68 billion that Wall Street had expected. But the sales were a new quarterly record, and up 17% year over year, providing evidence that headwinds Vertiv had faced in recent quarters are now in the past.
"2022 was a pivotal and transformative year for Vertiv that culminated in our best quarter ever, with strong year-over-year and sequential growth in revenue, operating profit, margins, cash flow and a record backlog," CEO Giordano Albertazzi said in a statement. "Supply chain pressures are easing, pricing continues to improve, and we have made steady progress in the Americas with operating margins in that segment rebounding to over 20% in the fourth quarter."
Vertiv ended the quarter with a backlog of future business totaling $4.8 billion. That's an increase of 49% over the end of 2021.
NYSE: VRT
Key Data Points
Now what
Vertiv sees more growth ahead. The company is forecasting adjusted earnings of between $1.17 and $1.27 per share in fiscal 2023 on revenue of between $6.45 billion and $6.6 billion. That implies upside of $1.11 per share in earnings on the sales of $6.06 billion that analysts are expecting.
Albertazzi said that although the company remains "cautious about an uncertain macroeconomic outlook, we continue to see healthy demand in our end markets and are confident in our positive outlook for 2023."
Although not a household name, Vertiv provides equipment necessary to make data centers function and is an intriguing way for investors to gain exposure to the ongoing cloud revolution. Given the potential and its outlook for 2023, there is a lot of optimism surrounding Vertiv coming out of earnings.
