Anticipating Vertiv (VRT) Q4 Earnings Anticipating Vertiv (VRT) Q4 Earnings

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By Ronald Tech

Vertiv Holdings VRT is set to report fourth-quarter 2023 results on Feb 21, before market open.

The company projects fourth-quarter revenues in the band of $1.83-$1.85 billion. The Zacks Consensus Estimate for the top line is currently pegged at $1.89 billion, indicating an improvement of 14.1% year over year.

Vertiv expects adjusted earnings per share between 48 cents and 52 cents. The consensus mark is pegged at 54 cents per share, implying a whopping 92.86% improvement from the year-ago quarter’s figure.

The company expects fourth-quarter 2023 adjusted operating income between $295 million and $305 million, suggesting a margin of 15.9-16.7%. VRT’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 27.8%.

Factors Affecting Earnings

A growing customer base, backed by the elevated demand for Vertiv’s cloud-based solutions amid the ongoing digitalizing trend, is expected to have contributed to the company’s fourth-quarter revenues. The to-be-reported quarter’s top line is likely to have experienced the impact of expanding its global footprint outside the Americas. It is worth mentioning that the Americas, EMEA and APAC represented 57.6%, 20.1% and 22.3% of the total revenues, respectively, in the third quarter.

Vertiv’s fourth-quarter results are likely to benefit from the robust demand for its hardware, software and analytics solutions. Sustained gains from pricing and sizable investments in all end markets, such as artificial intelligence and data centers, are likely to have driven VRT’s performance in the to-be-reported quarter.

The critical digital infrastructure and continuity solutions provider is likely to have witnessed improved operational execution and supply-chain flow in the quarter to be reported. Nevertheless, VRT’s considerable exposure to material, freight and labor inflation and persistent investments in research and development are expected to have weighed on its bottom-line performance in the to-be-reported quarter.

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Earnings Forecast and Insights

Our proven model predicts an earnings beat for Vertiv this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +1.90%.

Zacks Rank: VRT carries a Zacks Rank #2 at present.

Other Stocks to Watch

Per our model, Inseego INSG, Cogent Communications CCOI and NVIDIA NVDA are some other stocks that, too, have the right combination of elements to post an earnings beat in their upcoming releases.

Inseego has an Earnings ESP of +4.17% and carries a Zacks Rank #2 at present. The company is scheduled to report fourth-quarter fiscal 2023 results on Feb 21.

Cogent Communications has an Earnings ESP of +10.00% and carries a Zacks Rank #3 at present. The company is scheduled to report fourth-quarter fiscal 2023 results on Feb 29.

NVIDIA has an Earnings ESP of +3.67% and carries a Zacks Rank #2 at present. The company is scheduled to report fourth-quarter fiscal 2024 results on Feb 21.

Stay tuned for upcoming earnings announcements with the Zacks Earnings Calendar.