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Gencor Stock Gains Following Q2 Earnings Amid Revenue Decline
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Shares of Gencor Industries, Inc. (GENC - Free Report) have gained 4.1% since the company reported its earnings for the quarter ended March 31, 2025. This compares to the S&P 500 Index’s 0.1% gain over the same time frame. Over the past month, the stock gained 4.9% compared with the S&P 500’s 3% rise.
GENC’s Financial Performance Snapshot
For the second quarter of fiscal 2025, Gencor reported net revenues of $38.2 million, down 6.1% from $40.7 million in the prior-year quarter. This decline was mainly driven by lower contract equipment sales recognized at a point in time due to shipment timing. Despite this, gross profit remained solid at $11.4 million, though it fell 7.9% from $12.3 million a year ago. Gross margin compressed modestly to 29.7% from 30.3% as material costs edged higher. Net income for the quarter ended March 31, 2025, was $6.1 million, down 2% from $6.2 million a year earlier. Earnings per share remained unchanged at $0.42 per basic and diluted common share.
For the six months, Gencor posted $69.6 million in revenues, up 4.4% from $66.7 million in the comparable 2024 period, while net income declined to $9.9 million, or $0.68 per share, from $10.5 million, or $0.72 per share.
Gencor’s Other Key Business Metrics
Operating income for the quarter was $6.5 million, down 8.4% from $7.1 million in the same quarter last year. The drop was attributed to lower revenues. Operating expenses declined 7.2% to $4.9 million from $5.3 million, reflecting cost control efforts—most notably a 23.7% reduction in product engineering and development costs due to reduced headcount. Selling, general and administrative expenses were trimmed by 3.8% due to lower sales commissions.
Net other income increased 74.2% to $1.8 million from $1 million, helped by a $598,000 gain on marketable securities and higher interest and dividend income due to stronger returns on a larger cash position.
Gencor’s balance sheet remained robust with no short- or long-term debt. As of March 31, 2025, Gencor held $52.3 million in cash and $91.4 million in marketable securities, up from a combined $115.4 million as of Sept. 30, 2024.
Gencor Industries Inc. Price, Consensus and EPS Surprise
Marc Elliott, Gencor’s president, expressed satisfaction with the company's overall performance, especially highlighting strong first-quarter results. Elliott noted that despite a slight decline in fiscal second-quarter revenues, GENC’s six-month revenue and operating income significantly exceeded fiscal 2024 performance. Elliott emphasized a renewed focus on market growth and operational efficiency for the remainder of 2025, supported by a commitment to high-quality products and services.
Gencor’s Factors Influencing Headline Numbers
Gencor attributed the revenue decline to the timing of equipment shipments—a cyclical feature of its business given customer seasonality in the highway construction sector. The company’s product mix also played a role; a higher proportion of lower-margin contract equipment sales and reduced high-margin parts and components sales weighed on gross margin.
On the expense side, savings from reduced headcount and lower commissions helped limit the drop in profitability. Favorable financial market conditions provided a tailwind via investment income, partially offsetting operational headwinds.
Inventories declined to $55.1 million as of March 31, 2025, from $63.8 million as of Sept. 30, 2024, primarily due to the shipment of large contract orders and strong sales of pavers. Backlog, however, shrank significantly to $27.8 million as of March 31, 2025, from $50.4 million a year earlier, potentially signaling a moderation in forward demand.
Additionally, economic headwinds such as inflation, supply chain disruptions, and geopolitical uncertainties—including conflicts in Ukraine and the Middle East—were cited as risk factors potentially impacting material costs and customer spending.
GENC’s Guidance
Gencor did not issue explicit forward guidance for the remainder of fiscal 2025. However, management expressed a cautious but constructive outlook, with expectations for a “more traditional market” in the latter half of fiscal 2025.
Gencor’s Other Developments
No acquisitions, divestitures, or significant business restructurings were reported during the quarter. However, GENC did disclose an ongoing effort to improve its internal controls. Material weaknesses in financial reporting identified as of September 2024 had not been remediated by March 2025. Management, under audit committee oversight, is actively working on remediation steps, including a reassessment of internal controls and enhancement of risk assessment procedures.
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Gencor Stock Gains Following Q2 Earnings Amid Revenue Decline
Shares of Gencor Industries, Inc. (GENC - Free Report) have gained 4.1% since the company reported its earnings for the quarter ended March 31, 2025. This compares to the S&P 500 Index’s 0.1% gain over the same time frame. Over the past month, the stock gained 4.9% compared with the S&P 500’s 3% rise.
GENC’s Financial Performance Snapshot
For the second quarter of fiscal 2025, Gencor reported net revenues of $38.2 million, down 6.1% from $40.7 million in the prior-year quarter. This decline was mainly driven by lower contract equipment sales recognized at a point in time due to shipment timing. Despite this, gross profit remained solid at $11.4 million, though it fell 7.9% from $12.3 million a year ago. Gross margin compressed modestly to 29.7% from 30.3% as material costs edged higher. Net income for the quarter ended March 31, 2025, was $6.1 million, down 2% from $6.2 million a year earlier. Earnings per share remained unchanged at $0.42 per basic and diluted common share.
For the six months, Gencor posted $69.6 million in revenues, up 4.4% from $66.7 million in the comparable 2024 period, while net income declined to $9.9 million, or $0.68 per share, from $10.5 million, or $0.72 per share.
Gencor’s Other Key Business Metrics
Operating income for the quarter was $6.5 million, down 8.4% from $7.1 million in the same quarter last year. The drop was attributed to lower revenues. Operating expenses declined 7.2% to $4.9 million from $5.3 million, reflecting cost control efforts—most notably a 23.7% reduction in product engineering and development costs due to reduced headcount. Selling, general and administrative expenses were trimmed by 3.8% due to lower sales commissions.
Net other income increased 74.2% to $1.8 million from $1 million, helped by a $598,000 gain on marketable securities and higher interest and dividend income due to stronger returns on a larger cash position.
Gencor’s balance sheet remained robust with no short- or long-term debt. As of March 31, 2025, Gencor held $52.3 million in cash and $91.4 million in marketable securities, up from a combined $115.4 million as of Sept. 30, 2024.
Gencor Industries Inc. Price, Consensus and EPS Surprise
Gencor Industries Inc. price-consensus-eps-surprise-chart | Gencor Industries Inc. Quote
GENC’s Management Commentary
Marc Elliott, Gencor’s president, expressed satisfaction with the company's overall performance, especially highlighting strong first-quarter results. Elliott noted that despite a slight decline in fiscal second-quarter revenues, GENC’s six-month revenue and operating income significantly exceeded fiscal 2024 performance. Elliott emphasized a renewed focus on market growth and operational efficiency for the remainder of 2025, supported by a commitment to high-quality products and services.
Gencor’s Factors Influencing Headline Numbers
Gencor attributed the revenue decline to the timing of equipment shipments—a cyclical feature of its business given customer seasonality in the highway construction sector. The company’s product mix also played a role; a higher proportion of lower-margin contract equipment sales and reduced high-margin parts and components sales weighed on gross margin.
On the expense side, savings from reduced headcount and lower commissions helped limit the drop in profitability. Favorable financial market conditions provided a tailwind via investment income, partially offsetting operational headwinds.
Inventories declined to $55.1 million as of March 31, 2025, from $63.8 million as of Sept. 30, 2024, primarily due to the shipment of large contract orders and strong sales of pavers. Backlog, however, shrank significantly to $27.8 million as of March 31, 2025, from $50.4 million a year earlier, potentially signaling a moderation in forward demand.
Additionally, economic headwinds such as inflation, supply chain disruptions, and geopolitical uncertainties—including conflicts in Ukraine and the Middle East—were cited as risk factors potentially impacting material costs and customer spending.
GENC’s Guidance
Gencor did not issue explicit forward guidance for the remainder of fiscal 2025. However, management expressed a cautious but constructive outlook, with expectations for a “more traditional market” in the latter half of fiscal 2025.
Gencor’s Other Developments
No acquisitions, divestitures, or significant business restructurings were reported during the quarter. However, GENC did disclose an ongoing effort to improve its internal controls. Material weaknesses in financial reporting identified as of September 2024 had not been remediated by March 2025. Management, under audit committee oversight, is actively working on remediation steps, including a reassessment of internal controls and enhancement of risk assessment procedures.