Vertiv Holdings Co. (NYSE: VRT) reported Q3 EPS of $0.32, $0.05 better than the analyst estimate of $0.27. Revenue for the quarter came in at $1.16 billion versus the consensus estimate of $1.11 billion.

• Net sales growth of 8.5% from last year’s third quarter fueled by continued strong demand from cloud and colocation market segments. Orders were 15.5% higher than the third quarter of 2019 driving a record backlog of $1.85 billion.
• Third quarter net loss of $16 million includes $80 million of restructuring program expenses composed of a $71 million restructuring reserve and a $9 million impairment loss. Third quarter adjusted EBITDA of $179 million increased $43 million, or 31%, and related margin expanded 270 basis points from the same period last year.
• The restructuring program is expected to drive $85 million annualized run-rate cost savings by fiscal year 2023.
• Strong third quarter net cash provided by operating activities of $138 million and third quarter free cash flow of $129 million contributed to quarter-end liquidity of $653 million.

“We are pleased that our performance continues to improve as we delivered strong financial results amid business and marketplace headwinds caused by the global coronavirus pandemic. I am proud of the Vertiv team around the world,” said Rob Johnson, Vertiv’s Chief Executive Officer. “We continue to build on our strong foundation by increasing use of the Vertiv Operating System (VOS), expanding our Vertiv Product Development (VPD) innovation programs and using our Vertiv User Experience (VUE) process while holding fixed costs constant. These tools and processes help strengthen our relentless focus on our customers and will serve us well as we grow our top line and expand margins.

“We expect that the underlining demand for data and digital solutions, for both individuals and businesses across many sectors, will continue to be strong through the remainder of the year,” added Johnson. “At Vertiv, we will continue to innovate, be nimble and bring meaningful technology solutions to our customers for their vital applications.”

Dave Cote, Vertiv’s Executive Chairman, said, “We remain confident that the actions taken since the company became public in February are building a value-creating foundation. Just nine months ago, we said that Vertiv has a great position in a good industry with an excellent management team and a strategy to continue building its leadership position. During the past several months that has proven true, and the team at Vertiv has stepped up to do what is necessary to win in a challenging global economic environment.”

GUIDANCE:

Vertiv Holdings Co. sees Q4 2020 EPS of $0.32-$0.35, versus the consensus of $0.34. Vertiv Holdings Co. sees Q4 2020 revenue of $1.24-1.265 billion, versus the consensus of $1.11 billion.

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