Key Highlights

  • VRT shares are indicated up 15.77% at $241.45 in premarket, against a prior close of $208.56.
  • Q3 net sales were $4.31 billion, up 61%, and adjusted EPS of $2.21 beat the $1.82 consensus.
  • Organic orders grew more than 100% year over year.
  • Full-year sales guidance rose $650 million at the midpoint to $14.65 billion, with adjusted EPS of $7.15 against $6.73 expected.
  • Vertiv closed the $1.45 billion UtilityInnovation Group acquisition.

Vertiv (NYSE:VRT) shares are indicated up 15.77% at $241.45 in premarket after third-quarter results that beat on every key line. Net sales of $4.31 billion rose 61%, including 55% organic growth, and topped the roughly $3.75 billion estimate. Adjusted EPS of $2.21, up 78%, beat consensus of $1.82. Adjusted operating profit rose 83% to $1.09 billion, and the adjusted operating margin widened 290 basis points to 25.2%.

Vertiv, headquartered in Westerville, Ohio, designs, manufactures and services power management, thermal and liquid cooling, and integrated rack systems for data centers, communication networks and commercial and industrial sites. Its brands include Liebert, NetSure, Geist and Avocent, and it sells in more than 130 countries under CEO Giordano Albertazzi.

Orders More Than Double as Demand Broadens

Organic orders more than doubled from a year earlier. Growth was broad across regions: the Americas rose 75% (66% organic), Asia Pacific rose 50% (48% organic) and EMEA rose 23% (19% organic). "We are in the middle of the largest infrastructure buildout and it's accelerating," Albertazzi said.

Operating cash flow was $794 million, and adjusted free cash flow rose 50% to $652 million. Liquidity increased to $6.2 billion, and Vertiv kept a net cash position.

Guidance Raised Across Key Metrics

Vertiv raised its full-year sales outlook by $650 million at the midpoint to $14.65 billion, with organic growth of 38%. Adjusted EPS guidance of $7.10 to $7.20, centered on $7.15, compares with the $6.73 consensus. Adjusted free cash flow is expected at $2.6 billion to $2.8 billion.

Fourth-quarter guidance also came in above Street estimates. Vertiv expects net sales of $4.41 billion at the midpoint, with organic growth of 50%, and adjusted EPS of $2.22 to $2.28.

Rebound After a Weak Month

The stock had fallen about 16% over the prior month before Tuesday's 4.39% gain to $208.56, and the 52-week range runs from $147.82 to $379.94. Investors are also weighing the closing of the UtilityInnovation Group acquisition for $1.45 billion, which adds microgrid and onsite power capabilities.

Peer GE Vernova (NYSE:GEV) also rose on strong orders and a $9 billion deal. The Fed decision and Alphabet (NASDAQ:GOOGL) and Microsoft (NASDAQ:MSFT) earnings are due later today, and the Vertiv earnings call is this morning.