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Jun 30, 2020
Aaon Q2 2020 Earnings Report
Reported earnings and backlog for the second quarter of 2020, facing workforce impacts from employee absences but demonstrating resilience through improved efficiency and fiscal responsibility.
Key Takeaways
AAON reported a challenging but positive second quarter in 2020. Despite workforce impacts from employee absences, the company saw a 5.2% increase in net sales and a 33.0% increase in net income compared to the same period last year. Improved efficiency, fiscal responsibility, and declining raw material costs contributed to improved gross profit and bottom line.
Net sales increased by 5.2% to $125.6 million compared to Q2 2019.
Net income increased by 33.0% to $17.8 million compared to Q2 2019.
Earnings per diluted share increased by 36.0% to $0.34 compared to Q2 2019.
The company's backlog decreased by 27.5% to $103.5 million compared to June 30, 2019.
Aaon
Aaon
Forward Guidance
The outlook for the remainder of the year is hard to predict due to ongoing uncertainty. Despite this uncertainty, the company remains cautiously optimistic that the year will end with modest revenue growth over 2019.
Positive Outlook
- Most of the workforce affected by COVID-19 has recovered and returned to work.
- Employee absenteeism levels have significantly improved in the first part of July.
- The company has implemented several safety procedures concerning COVID-19.
- The company's financial condition remains strong.
- Orders are anticipated to increase as lead times improve during the peak selling season.
Challenges Ahead
- Incoming order rate has recently softened slightly due to less than optimal lead times.
- Turmoil in the market resulting from COVID-19.
- Uncertainty in the education industry could negatively impact employee attendance levels.
- Uncertainty in the education industry could negatively impact bookings.
- The outlook for the remainder of the year is hard to predict during these uncertain times.