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Sep 30, 2024
Chart Q3 2024 Earnings Report
Chart Industries reported a strong third quarter in 2024, marked by increased sales, orders, and profitability, driven by growth across all segments and successful synergy realization.
Key Takeaways
Chart Industries reported a strong Q3 2024 with sales of $1.06 billion, a 22.4% increase year-over-year, and orders of $1.17 billion, up 5.4%. The company achieved a record gross profit margin of 34.1% and an adjusted operating margin of 22.2%. Adjusted EPS was $2.18, and free cash flow was $174.6 million. The company is reiterating its full year 2024 free cash flow outlook of approximately $400 million.
Sales increased by 22.4% to $1.06 billion, driven by growth in all segments.
Orders increased by 5.4% to $1.17 billion, with strong demand in Heat Transfer Systems and Repair, Service and Leasing.
Adjusted operating margin reached a record 22.2%, reflecting cost synergy achievements and operational performance.
Free cash flow was $174.6 million, contributing to a net leverage ratio decrease to 3.04.
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Forward Guidance
Chart Industries anticipates full year 2024 sales of approximately $4.20 billion to $4.30 billion, adjusted EBITDA of approximately $1.015 billion to $1.045 billion, and adjusted diluted EPS of approximately $9.00. FCF is anticipated to be approximately $400 million.
Positive Outlook
- Full year 2024 sales outlook is approximately $4.20 billion to $4.30 billion, an increase of 18.0% to 20.5% when compared with full year 2023, proforma.
- Anticipate full year 2024 adjusted EBITDA of approximately $1.015 billion to $1.045 billion, approximately 24.2% to 24.3% EBITDA margin.
- Full year 2024 adjusted diluted EPS is expected to be approximately $9.00 based on a tax rate of approximately 22% and a diluted share count of approximately 46.5 million shares for the full year 2024.
- FCF is anticipated to be approximately $400 million.
- 2025 sales are anticipated to be in the range of $4.65 billion to $4.85 billion with associated adjusted EBITDA between $1.175 billion and $1.225 billion.
Challenges Ahead
- Changes to the 2024 outlook are primarily due to timing of larger orders and their associated revenue recognition (timing and mix).
- Foreign exchange impact.
- Tax rate change.
- Share count change.
- Net leverage ratio target of 2.0 to 2.5