AAON, Inc. (NASDAQ:AAON) shares tumbled 14.6% in premarket trading Monday after the HVAC manufacturer posted second-quarter results that missed analyst forecasts, citing operational setbacks from a new Enterprise Resource Planning (ERP) system rollout.
The company reported adjusted earnings of $0.22 per share, well below the consensus estimate of $0.34. Quarterly revenue totaled $311.6 million, short of the $326.15 million expected by analysts and down 0.6% year over year. Gross profit margin dropped sharply to 26.6% from 36.1% in the prior-year period.
“Our second quarter results fell short of our expectations and do not reflect the high standards we set for ourselves as an organization,” said CEO Matt Tobolski. “The underperformance was primarily driven by poor operational execution, mainly associated with the implementation of our new ERP system at our Longview, Texas facility.”
The ERP rollout had a notable impact on operations, particularly at the AAON Oklahoma division, which saw net sales decline 18%. Meanwhile, AAON Coil Products recorded an 86.4% jump in sales but suffered a steep margin drop, with gross profit margin sliding to 22.0% from 41.9% a year earlier.
Despite the short-term setbacks, the company reported strong demand trends, with bookings and backlog surging 71.9% year over year to $1.12 billion. Management noted robust growth in the data center market, where demand remains especially strong.
AAON lowered its 2025 guidance, now projecting low-teens percentage sales growth for the year with gross margins in the 28–29% range, down from previous forecasts. The company expects gradual improvement in operational performance over the second half of the year as production issues are resolved.
This content is for informational purposes only and does not constitute financial, investment, or other professional advice. It should not be considered a recommendation to buy or sell any securities or financial instruments. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. You should conduct your own research and consult with a qualified financial advisor before making any investment decisions.