Shares of manufacturer Chart Industries (GTLS -1.32%) fell 25% in trading on Friday after it announced third-quarter 2023 financial results.
A disappointing quarter for Chart Industries
Revenue was up nearly 10% from a year ago, to $898 million, and the net loss was $3.4 million, or $0.08 per share. Adjusting for one-time costs, earnings were $1.28 per share, up from $1.19 a year ago.
The results were impacted by some divestitures, but what really disappointed investors was performance related to expectations. Analysts had expected $1.03 billion in revenue and earnings of $1.61 per share, so results fell well short of that.
Management sees strength
Management touted a record backlog of $4.1 billion, up 4.4% sequentially, on strength across the business.
Guidance for the full year was also updated. Revenue is now expected to be $3.45 billion to $3.5 billion, below the $3.66 billion to $3.8 billion guidance given previously thanks to the divestiture of American Fan, Cryo Diffusion, and Cofimco. But adjusted free cash flow is now expected to be $335 million to $350 million, increasing the bottom end of guidance by $15 million.
I don't think the quarter was as bad as some investors thought, but that doesn't mean the stock is a great value today. A $4.8 billion market cap combined with $3.8 billion in debt makes this an expensive, highly leveraged stock. With economic uncertainty ahead, this is a discount I'll pass on today.
