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TULSA, Okla. - AAON , Inc. (NASDAQ:AAON), a premium HVAC solutions provider, reported fourth quarter earnings that fell well short of analyst expectations, sending shares tumbling 17% in after-hours trading.
The company posted adjusted earnings per share of $0.30 for Q4, missing the analyst consensus of $0.53 by a wide margin. Revenue also disappointed, coming in at $297.72 million versus estimates of $331.02 million and down 2.9% YoY.
AAON’s CEO Gary Fields cited challenges including an industry-regulated refrigerant transition and weakening nonresidential construction activity as key factors impacting results. The company’s AAON Oklahoma segment saw a 16.1% YoY decline in sales, driving the overall revenue drop.
Gross profit for the quarter decreased 30.5% to $77.6 million, with gross margin contracting to 26.1% from 36.4% a year ago. The company attributed this to lower volumes and fixed cost deleveraging at its Oklahoma segment, as well as growth investments in data center products.
Despite the disappointing quarter, AAON’s total backlog finished 2024 up 70% from the end of 2023, driven by strong demand for data center cooling solutions from its BASX brand.
"As we move into the second quarter, we expect these headwinds will dissipate, resulting in an acceleration in demand," Fields stated, projecting improved margins as volume growth picks up throughout 2025.
The company’s board approved a new $100 million share repurchase program, though near-term focus remains on organic investments to support growth.
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