Why Chart Industries Shares Are Rising Today

Chart Industries, Inc. GTLS reported second-quarter FY23 sales growth of 10.3% year-over-year on a proforma basis for the combined business to $908.1 million, missing the consensus of $971.81 million.

Adjusted EPS was $1.19, beating the consensus of $0.93.

The company's Q2 results from continuing operations reflect the first full quarter of ownership of Howden and exclude the Root financial results for the entire ownership period.

Both reported gross and EBITDA margins grew 300 basis points or more (proforma to include Howden).

Operating income was $95.7 million, and adjusted operating income was $154.4 million, or 17% of operating income as a percent of sales.

Adjusted EBITDA increased to $195.3 million, and the margin expanded by over 500 bps to 21.5%

Chart Industries' cash provided by operating activities for the quarter totaled $91.6 million, compared to $34.7 million a year ago. Adjusted Free cash flow was $86.6 million.

Orders were $1.06 billion, and backlog increased to $3.96 billion.

The company achieved $94.3 million of commercial synergies and $96.5 million of cost synergies to date.

The company agreed to sell Comco fans business to PX3 Partners, the London headquartered private equity firm, for an $80 million purchase price.

The company also sold a French product line for €4.25 million, expected to close in August 2023.

GTLS anticipates generating ~$500 million of potential proceeds from divestitures, including the $380 million from the announced Roots and Comco divestitures.

Related: Chart Industries Divests Roots Business To Ingersoll Rand For $300M

FY23 Outlook: Chart Industries reaffirms sales guidance of $3.66 billion-$3.80 billion versus consensus of $3.66 billion, with associated adjusted EBITDA of $780 million-$810 million.

It sees adjusted EPS of $5.70-$6.70 (prior $5.50-$6.70) vs. $5.93 consensus.

Price Action: GTLS shares traded higher by 8.26% at $171.68 on the last check Friday.

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