Vertiv Holdings Co. (NYSE: VRT) reported Q1 EPS of ($0.09), $0.05 worse than the analyst estimate of ($0.04). Revenue for the quarter came in at $897.3 million versus the consensus estimate of $950.52 million.

• Customer demand remains strong with orders up 13% and backlog at record high $1.6B
• COVID-19 impact and overall first quarter results in-line with our internal expectations
• Quickly implemented $60 million of mitigating cost actions to benefit rest of year 2020
• Strong liquidity at end of March expected to continue even under deeper downside scenarios

“Our performance in the first quarter of 2020, which was challenged compared to last year’s first quarter, came amidst an unprecedented global pandemic that necessitated virtually every company to modify how they do business. We acted decisively and with urgency to take appropriate actions across our operations to minimize the impact of COIVD-19 on our business, and I want to express my appreciation to every member of the Vertiv Team as they helped to keep us moving forward to service customers around the world,” said Rob Johnson, Vertiv Chief Executive Officer. “Vertiv has always prided itself on providing critical digital infrastructure to vital applications, and never has that been more true than during these challenging times. In many places around the world Vertiv was recognized as an essential business, and most of our plants, service organizations and offices – even if people are working remotely – continue to operate with few exceptions. It is important to note that prioritizing and implementing all best practice precautionary safety measures early-on enabled us to continue serving our customers through this pandemic.”

“Our first quarter order rate continued to be strong, and we ended March with an all-time high backlog of $1.6 billion. While demand varied across our market verticals and product lines, the robustness of our overall order rates demonstrates our place in the vital application ecosystem of data centers and communication networks. While market visibility can be blurred in different areas, at this time we believe demand for our products and services will be steady given the move to remote working, online education, video conferencing and technology based business models as evidenced by the continued strong demand from hyperscale and colocation customers. In the short-run we expect the small to midsized customer segments typically serviced through the IT channel to be challenged, and services will be mixed as accessing some customer locations in some geographies can be difficult.”

Dave Cote, Vertiv Executive Chairman, former Honeywell CEO and author of “Winning Now, Winning Later,” added, “I am proud of how Rob and the entire Vertiv Team has tackled this turbulent time with quick resolve by immediately implementing cost actions while servicing customers and positioning the company for long term success through continued investment in the Vertiv Operating System (VOS), product innovation, sales and service. Even during this recessionary time, the Team has a strong eye on the recovery. I truly believe that Vertiv will demonstrate solid results not only during this recession, but also coming out of it.”

2020 Guidance

We remain cautiously optimistic with our tactical and strategic position amid this global pandemic. The underlying data center and communications industries our products and services support are more critical today than ever before. Accordingly, customer orders remain strong, and we enter the second quarter with a record high backlog. From a production and supply perspective, our facilities are considered essential businesses in almost every geography, and our primary manufacturing facilities remain in operation today. However, the situation remains dynamic in many geographies which could negatively influence our ability to manufacture and deliver products to our customers. Due to this continuing COVID-19 production and supply uncertainty, we are withdrawing our full year 2020 financial guidance.

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