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Generac's Q4 Earnings & Revenues Surpass Estimates, GNRC Stock Up
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Generac Holdings Inc (GNRC - Free Report) reported fourth-quarter 2024 adjusted earnings per share (EPS) of $2.80, which beat the Zacks Consensus Estimate of $2.50. GNRC reported adjusted EPS of $2.07 in the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Net sales were $1.23 billion, up 16% compared with $1.06 billion reported in the prior-year quarter. The figure also beat the consensus estimate by 0.1%. The increase in Residential product sales offset soft Commercial & Industrial (“C&I”) product sales. GNRC’s efforts to boost production to meet higher demand for home standby and portable generators amid increasing power outage activity was the primary tailwind.
For 2024, GNRC reported adjusted EPS of $7.27 compared with $5.40 in the previous year. Revenues surged 7% to $4.3 billion. Core sales growth (excluding the impact of acquisitions and foreign currency) was up 6% from 2023.
GNRC initiated its expectations for 2025. For 2025, GNRC now expects revenues to increase 3-7%, including a slight unfavorable impact from the net effect of foreign currency and completed acquisitions. Residential Product sales are expected to be in the mid-to-high single-digit range, driven by shipments of home standby generators and residential energy technology solutions. C&I product sales are expected to be flat compared with 2024.
Generac Holdings Stock Price, Consensus and EPS Surprise
Net income margin (before deducting for non-controlling interests) is expected to be in the range of 8-9%. Adjusted EBITDA margin is estimated to be 18-19%. GNRC also expects to generate strong levels of operating and free cash flow in 2025.
Shares of GNRC are up 3.4% in the pre-market trading on Feb. 12. The stock has gained 14.5% compared with the Manufacturing-General Industrial industry’s growth of 10.7%.
Image Source: Zacks Investment Research
GNRC Performance by Business Segment
Segment-wise, Domestic revenues increased 20% year over year to $1.07 billion. Results were aided by acquisitions (contributing 1% increase). Core sales were driven by increased shipments of home standby and portable generators, and higher demand for residential energy storage systems and ecobee products.
International revenues fell 1% year over year to $187.5 million, which includes a 2% unfavorable impact from foreign currency fluctuations. Core revenue growth was mainly due to momentum in Latin America, partly offset by weakness in certain markets of Europe.
Product-wise, revenues from Residential surged 28% year over year to $743 million. C&I revenues totaled $363 million, unchanged year over year. Revenues from the Other product class totaled $128.1 million, up 6.4% year over year.
The Zacks Consensus Estimate for Residential and C&I products’ fourth-quarter revenues was pegged at $771 million and $341 million, respectively.
GNRC’s Margin Performance
Gross profit was $501.4 million, up from $388.7 million in the prior-year quarter, with respective margins of 40.6% and 36.5%. Gross profit margin performance gained from a favorable sales mix and lower input expenses.
Total operating expenses were $303.4 million, up 27.6% year over year, due to higher employee costs, marketing spending, variable expenses and incentive compensation.
Operating income was $198 million, up 31.2% year over year. Adjusted EBITDA, before deducting for non-controlling interests, was $265 million compared with $213 million a year ago.
GNRC’s Cash Flow & Liquidity
In the fourth quarter, the company generated $339 million of net cash from operating activities. Free cash flow totaled $286 million.
As of Dec. 31, 2024, GNRC had $281.3 million of cash and cash equivalents, with nearly $1.211 billion of long-term borrowings and finance-lease obligations.
In 2024, the company repurchased shares worth $153 million. GNRC had shares worth $347 million left under its buyback authorization as of Dec. 31, 2024.
In February 2024, GNRC had approved a new share buyback authorization that allows for a repurchase of up to $500 million in the next 24 months. It replaced the remaining balance on the earlier program.
Recent Performance of Other Companies in the Same Space
RBC Bearings Incorporated’s (RBC - Free Report) third-quarter fiscal 2025 (ended Dec. 28, 2024) adjusted earnings of $2.34 per share beat the Zacks Consensus Estimate of $2.20. The figure increased 26.5% from the year-ago adjusted earnings of $1.85 per share, supported by higher revenues. RBC’s revenues were $394.4 million, which increased 5.5% year over year. However, the figure missed the Zacks Consensus Estimate of $401 million.
Dover Corporation (DOV - Free Report) has reported fourth-quarter 2024 adjusted EPS from continuing operations of $2.20, beating the Zacks Consensus Estimate of $2.08. In the year-ago quarter, the company reported an adjusted EPS of $2.18 (excluding after-tax purchase accounting expenses and after-tax gain on disposition of a minority-owned equity method investment). On a reported basis, Dover has delivered earnings of $1.72 per share in the quarter, down 7% year over year. Total revenues in the fourth quarter increased 1.3% year over year to $1.93 billion. The top line missed the Zacks Consensus Estimate of $1.98 billion. Organic growth grew 0.3% in the quarter.
Applied Industrial Technologies (AIT - Free Report) reported second-quarter fiscal 2025 (ended Dec. 31, 2024) earnings of $2.39 per share, which surpassed the Zacks Consensus Estimate of $2.22. The bottom line increased 6.7% year over year. Net revenues of $1.07 billion missed the consensus estimate of $1.08 billion. The top line inched down 0.4% year over year. Acquisitions boosted the top line by 1.9%, while foreign-currency translation had a negative impact of 0.5%. Organic sales decreased 3.4% year over year. Selling days had a favorable impact of 1.6%.
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Generac's Q4 Earnings & Revenues Surpass Estimates, GNRC Stock Up
Generac Holdings Inc (GNRC - Free Report) reported fourth-quarter 2024 adjusted earnings per share (EPS) of $2.80, which beat the Zacks Consensus Estimate of $2.50. GNRC reported adjusted EPS of $2.07 in the prior-year quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Net sales were $1.23 billion, up 16% compared with $1.06 billion reported in the prior-year quarter. The figure also beat the consensus estimate by 0.1%. The increase in Residential product sales offset soft Commercial & Industrial (“C&I”) product sales. GNRC’s efforts to boost production to meet higher demand for home standby and portable generators amid increasing power outage activity was the primary tailwind.
For 2024, GNRC reported adjusted EPS of $7.27 compared with $5.40 in the previous year. Revenues surged 7% to $4.3 billion. Core sales growth (excluding the impact of acquisitions and foreign currency) was up 6% from 2023.
GNRC initiated its expectations for 2025. For 2025, GNRC now expects revenues to increase 3-7%, including a slight unfavorable impact from the net effect of foreign currency and completed acquisitions. Residential Product sales are expected to be in the mid-to-high single-digit range, driven by shipments of home standby generators and residential energy technology solutions. C&I product sales are expected to be flat compared with 2024.
Generac Holdings Stock Price, Consensus and EPS Surprise
Generac Holdings Inc. price-consensus-eps-surprise-chart | Generac Holdings Inc. Quote
Net income margin (before deducting for non-controlling interests) is expected to be in the range of 8-9%. Adjusted EBITDA margin is estimated to be 18-19%. GNRC also expects to generate strong levels of operating and free cash flow in 2025.
Shares of GNRC are up 3.4% in the pre-market trading on Feb. 12. The stock has gained 14.5% compared with the Manufacturing-General Industrial industry’s growth of 10.7%.
Image Source: Zacks Investment Research
GNRC Performance by Business Segment
Segment-wise, Domestic revenues increased 20% year over year to $1.07 billion. Results were aided by acquisitions (contributing 1% increase). Core sales were driven by increased shipments of home standby and portable generators, and higher demand for residential energy storage systems and ecobee products.
International revenues fell 1% year over year to $187.5 million, which includes a 2% unfavorable impact from foreign currency fluctuations. Core revenue growth was mainly due to momentum in Latin America, partly offset by weakness in certain markets of Europe.
Product-wise, revenues from Residential surged 28% year over year to $743 million. C&I revenues totaled $363 million, unchanged year over year. Revenues from the Other product class totaled $128.1 million, up 6.4% year over year.
The Zacks Consensus Estimate for Residential and C&I products’ fourth-quarter revenues was pegged at $771 million and $341 million, respectively.
GNRC’s Margin Performance
Gross profit was $501.4 million, up from $388.7 million in the prior-year quarter, with respective margins of 40.6% and 36.5%. Gross profit margin performance gained from a favorable sales mix and lower input expenses.
Total operating expenses were $303.4 million, up 27.6% year over year, due to higher employee costs, marketing spending, variable expenses and incentive compensation.
Operating income was $198 million, up 31.2% year over year. Adjusted EBITDA, before deducting for non-controlling interests, was $265 million compared with $213 million a year ago.
GNRC’s Cash Flow & Liquidity
In the fourth quarter, the company generated $339 million of net cash from operating activities. Free cash flow totaled $286 million.
As of Dec. 31, 2024, GNRC had $281.3 million of cash and cash equivalents, with nearly $1.211 billion of long-term borrowings and finance-lease obligations.
In 2024, the company repurchased shares worth $153 million. GNRC had shares worth $347 million left under its buyback authorization as of Dec. 31, 2024.
In February 2024, GNRC had approved a new share buyback authorization that allows for a repurchase of up to $500 million in the next 24 months. It replaced the remaining balance on the earlier program.
GNRC’s Zacks Rank
Generac currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in the Same Space
RBC Bearings Incorporated’s (RBC - Free Report) third-quarter fiscal 2025 (ended Dec. 28, 2024) adjusted earnings of $2.34 per share beat the Zacks Consensus Estimate of $2.20. The figure increased 26.5% from the year-ago adjusted earnings of $1.85 per share, supported by higher revenues. RBC’s revenues were $394.4 million, which increased 5.5% year over year. However, the figure missed the Zacks Consensus Estimate of $401 million.
Dover Corporation (DOV - Free Report) has reported fourth-quarter 2024 adjusted EPS from continuing operations of $2.20, beating the Zacks Consensus Estimate of $2.08. In the year-ago quarter, the company reported an adjusted EPS of $2.18 (excluding after-tax purchase accounting expenses and after-tax gain on disposition of a minority-owned equity method investment). On a reported basis, Dover has delivered earnings of $1.72 per share in the quarter, down 7% year over year. Total revenues in the fourth quarter increased 1.3% year over year to $1.93 billion. The top line missed the Zacks Consensus Estimate of $1.98 billion. Organic growth grew 0.3% in the quarter.
Applied Industrial Technologies (AIT - Free Report) reported second-quarter fiscal 2025 (ended Dec. 31, 2024) earnings of $2.39 per share, which surpassed the Zacks Consensus Estimate of $2.22. The bottom line increased 6.7% year over year. Net revenues of $1.07 billion missed the consensus estimate of $1.08 billion. The top line inched down 0.4% year over year. Acquisitions boosted the top line by 1.9%, while foreign-currency translation had a negative impact of 0.5%. Organic sales decreased 3.4% year over year. Selling days had a favorable impact of 1.6%.