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Generac (GNRC) Q4 Earnings & Revenues Top Estimates, Up Y/Y
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Generac Holdings Inc. (GNRC - Free Report) reported impressive fourth-quarter 2020 results, wherein the top and the bottom lines beat the respective Zacks Consensus Estimate.
The Waukesha, WI-based company’s shares gained 13.9% on Feb 11, closing the trading session at $316.11.
Net Income
On a GAAP basis, net income in the December quarter was $125 million or $1.97 per share compared with $69.6 million or $1.12 per share in the prior-year quarter. The improvement primarily resulted from higher operating income.
In 2020, net income was $350.6 million or $5.48 per share compared with $252 million or $4.03 per share in 2019.
Quarterly adjusted net income came in at $135.7 million or $2.12 per share compared with $96.5 million or $1.53 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 16 cents.
Generac Holdings Inc. Price, Consensus and EPS Surprise
Quarterly revenues were a record $761.1 million compared with $590.9 million in the year-ago quarter. The 28.8% improvement was primarily driven by strong demand for residential products. Generac continues to see unprecedented demand for its home standby generators due to higher power outage, while the ‘Home as a Sanctuary’ trend gains traction. The top line beat the consensus estimate of $726 million.
Segment-wise, Domestic revenues increased 37.2% year over year to $645.1 million. The growth was driven by a significant increase in shipments of home standby generators and the ramp up of PWRcell energy storage systems. International revenues declined 4.1% to $116 million. This was due to weakness in global Commercial & Industrial (C&I) product demand in several regions caused by the pandemic.
Product-wise, revenues from Residential products improved 54.6% to $498.7 million. Revenues from C&I products were $198.6 million, down from $217.1 million in the year-ago quarter. Revenues from other product classes came in at $63.8 million, up 24.4%.
Other Quarterly Details
Costs of goods sold increased 25% year over year to $460.9 million. Gross profit was $300.2 million, up from $222.2 million with respective margins of 39.4% and 37.6%. The increase was driven by a favorable sales mix from higher shipments of residential products and a lower mix of C&I products.
Total operating expenses were $129.1 million compared with $117.7 million in the prior-year quarter. This was due to higher variable expenses from an increase in sales volumes, incremental spend related to clean energy products and the impact of acquisitions. Operating income came in at $171.1 million, up 63.7%. Adjusted EBITDA was a record $195.8 million compared with $129.1 million in the year-ago quarter.
Cash Flow & Liquidity
In 2020, Generac generated a record $486.5 million of net cash from operations compared with $308.9 million in 2019. Free cash flow was $427.1 million, up from $250.7 million.
As of Dec 31, 2020, the company had $655.1 million in cash and cash equivalents with $841.8 million of long-term borrowings. This compares with the respective tallies of $322.9 million and $837.8 million a year ago.
2021 Outlook
For 2021, Generac expects revenue growth between 25% and 30% year over year. Net income margin (before deducting for non-controlling interests) is expected to be 15-16%, while adjusted EBITDA margin is estimated to be 24-25%.
Harsco delivered a trailing four-quarter positive earnings surprise of 463.1%, on average.
Luna Innovations delivered a trailing four-quarter positive earnings surprise of 47.5%, on average.
Riot Blockchain delivered a trailing four-quarter positive earnings surprise of 3.4%, on average.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Generac (GNRC) Q4 Earnings & Revenues Top Estimates, Up Y/Y
Generac Holdings Inc. (GNRC - Free Report) reported impressive fourth-quarter 2020 results, wherein the top and the bottom lines beat the respective Zacks Consensus Estimate.
The Waukesha, WI-based company’s shares gained 13.9% on Feb 11, closing the trading session at $316.11.
Net Income
On a GAAP basis, net income in the December quarter was $125 million or $1.97 per share compared with $69.6 million or $1.12 per share in the prior-year quarter. The improvement primarily resulted from higher operating income.
In 2020, net income was $350.6 million or $5.48 per share compared with $252 million or $4.03 per share in 2019.
Quarterly adjusted net income came in at $135.7 million or $2.12 per share compared with $96.5 million or $1.53 per share in the year-ago quarter. The bottom line beat the Zacks Consensus Estimate by 16 cents.
Generac Holdings Inc. Price, Consensus and EPS Surprise
Generac Holdings Inc. price-consensus-eps-surprise-chart | Generac Holdings Inc. Quote
Revenues
Quarterly revenues were a record $761.1 million compared with $590.9 million in the year-ago quarter. The 28.8% improvement was primarily driven by strong demand for residential products. Generac continues to see unprecedented demand for its home standby generators due to higher power outage, while the ‘Home as a Sanctuary’ trend gains traction. The top line beat the consensus estimate of $726 million.
Segment-wise, Domestic revenues increased 37.2% year over year to $645.1 million. The growth was driven by a significant increase in shipments of home standby generators and the ramp up of PWRcell energy storage systems. International revenues declined 4.1% to $116 million. This was due to weakness in global Commercial & Industrial (C&I) product demand in several regions caused by the pandemic.
Product-wise, revenues from Residential products improved 54.6% to $498.7 million. Revenues from C&I products were $198.6 million, down from $217.1 million in the year-ago quarter. Revenues from other product classes came in at $63.8 million, up 24.4%.
Other Quarterly Details
Costs of goods sold increased 25% year over year to $460.9 million. Gross profit was $300.2 million, up from $222.2 million with respective margins of 39.4% and 37.6%. The increase was driven by a favorable sales mix from higher shipments of residential products and a lower mix of C&I products.
Total operating expenses were $129.1 million compared with $117.7 million in the prior-year quarter. This was due to higher variable expenses from an increase in sales volumes, incremental spend related to clean energy products and the impact of acquisitions. Operating income came in at $171.1 million, up 63.7%. Adjusted EBITDA was a record $195.8 million compared with $129.1 million in the year-ago quarter.
Cash Flow & Liquidity
In 2020, Generac generated a record $486.5 million of net cash from operations compared with $308.9 million in 2019. Free cash flow was $427.1 million, up from $250.7 million.
As of Dec 31, 2020, the company had $655.1 million in cash and cash equivalents with $841.8 million of long-term borrowings. This compares with the respective tallies of $322.9 million and $837.8 million a year ago.
2021 Outlook
For 2021, Generac expects revenue growth between 25% and 30% year over year. Net income margin (before deducting for non-controlling interests) is expected to be 15-16%, while adjusted EBITDA margin is estimated to be 24-25%.
Zacks Rank & Stocks to Consider
Generac currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader sector are Harsco , Luna Innovations (LUNA - Free Report) and Riot Blockchain (RIOT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Harsco delivered a trailing four-quarter positive earnings surprise of 463.1%, on average.
Luna Innovations delivered a trailing four-quarter positive earnings surprise of 47.5%, on average.
Riot Blockchain delivered a trailing four-quarter positive earnings surprise of 3.4%, on average.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020 Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2021 today >>