SPX Q2 2022 Earnings Report
Key Takeaways
SPX Corporation reported strong Q2 results with revenue growth driven by both HVAC and Detection & Measurement segments. Adjusted operating income increased by 47%, and margin increased by 220 basis points. The company raised its full-year adjusted EPS guidance to reflect the strong Q2 results, outlook for the second half, and impact of stock repurchases.
HVAC and Detection & Measurement segments generated strong organic and acquisition revenue growth.
Total adjusted operating income grew 47%, with margin up 220 basis points.
The company plans to implement a new holding company structure to better align legal entities with business objectives.
Adjusted EPS guidance for the full year was raised to reflect strong Q2 results and outlook.
SPX
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SPX Revenue by Segment
Forward Guidance
SPX Corporation increased its full-year 2022 guidance to reflect the strength of Q2 results and solid second-half demand. The company now anticipates higher full-year revenue in both HVAC and Detection & Measurement, and it has increased its midpoint adjusted EPS guidance to a range of $2.70 to $2.85.
Positive Outlook
- HVAC: Expect Q3 results to be similar to Q2 with a significant increase in Q4.
- HVAC: Expect full year margin of approximately 14% due to continued supply challenges, partially offset by higher pricing.
- Detection & Measurement: anticipate second half results to reflect continued strength with Q3 being similar to Q2 results, followed by an even stronger Q4.
- Detection & Measurement: Continue to expect full year margin in the 19% to 21% range.
- The company anticipates the bulk of its cash generation in this year is coming in the second half.
Challenges Ahead
- HVAC: Continued supply challenges.
- HVAC: Labor challenges in Olathe plant and Bennettsville facility.
- Modestly higher corporate costs in Q3.
- Higher tax rate in Q3.
- Risk areas in supply chain.
Revenue & Expenses
Visualization of income flow from segment revenue to net income