TULSA, Okla. - AAON, INC. (NASDAQ:AAON), a leading manufacturer of heating, ventilation, and air conditioning equipment (HVAC), announced a strong finish to 2023 with fourth-quarter earnings surpassing analyst expectations.
The company reported earnings per share (EPS) of $0.56, which is $0.03 higher than the consensus estimate of $0.53. Revenue for the quarter reached a record $306.64 million, also exceeding the consensus estimate of $294.36 million.
The fourth quarter saw a significant increase of 20.4% in net sales compared to the same quarter last year, which stood at $254.6 million. This growth was attributed to a healthy backlog entering the quarter and improved operational efficiencies, which led to an organic volume growth of approximately 9.3% year-over-year (YoY).
CEO Gary Fields expressed satisfaction with the company's performance, highlighting record sales, EBITDA, and earnings for the year. "Improved productivity was a key factor to both production output and margin expansion," Fields said. The gross profit margin for the quarter was notably higher at 36.4%, up from 30.8% in the previous year's quarter, reflecting productivity gains and incremental pricing.
The company's backlog at the end of the fourth quarter was $510.0 million, up 4.0% from the end of the third quarter, although it was down 6.9% from $548.0 million at the end of 2022. Despite the year-over-year decrease, the bookings in the fourth quarter outpaced production, leading to a sequential increase in backlog.
Looking ahead, Fields remains cautiously optimistic for 2024, citing potential slowing in the nonresidential construction sector and uncertainties surrounding the new refrigerant transition. However, he believes AAON is well-positioned to continue taking market share and driving growth due to its advanced position in new refrigerant equipment and cold climate air-source heat pumps.
CFO Rebecca Thompson commented on the financial strength of the company, noting, "Our cash flows from operating activities strengthened in both the fourth quarter and 2023, growing year-over-year 189.0% and 159.1%, respectively, and outpacing earnings growth in the respective periods." She also mentioned the strong balance sheet, with a current ratio of 3.2 and a leverage ratio of 0.15.
The company did not provide specific guidance figures in the press release, and there was no mention of stock movement following the earnings release, suggesting that the market response was not significant enough to warrant attention in this context.
Founded in 1988, AAON continues to lead in the HVAC industry with its innovative approach to designing and manufacturing customizable equipment tailored to meet specific needs.
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