AAON Inc. (NASDAQ: AAON), a prominent manufacturer of heating and cooling equipment, experienced a 5.08% plummet in its stock price on Friday, February 28th, 2025. The stock closed at $80.62 after dropping from the previous day's close of $84.92.

The plummet can be attributed to AAON's disappointing fourth-quarter earnings report for the fiscal year 2024, which missed analysts' estimates. The company's revenue and earnings per share (EPS) failed to meet expectations, primarily due to softening demand and operational challenges in its core segments.

According to AAON's earnings release, the company reported a revenue of $1.20 billion for the full year 2024, up 2.7% from the previous year. However, net income declined by 5.1% to $168.6 million, and profit margins contracted from 15% to 14%, driven by higher expenses. The company's EPS of $2.07 fell short of analyst expectations, signaling potential concerns about its profitability and growth prospects.

The earnings call transcript revealed that the Aaon Oklahoma segment, which focuses on rooftop units, faced significant disruptions caused by the refrigerant transition and weaker non-residential construction activity. These headwinds resulted in softer demand and challenges in production planning, leading to a 16.1% decline in sales for the segment during the fourth quarter.

Furthermore, while the Basics brand, catering to the data center market, experienced robust growth, the Redmond facility faced capacity constraints and operational inefficiencies, negatively impacting margins. AAON acknowledged these challenges and highlighted ongoing efforts to expand production capacity and improve operational efficiencies.