Power-backup systems maker Generac (GNRC) reported stronger-than-expected second-quarter earnings early Wednesday, as demand picks up amid wildfires, hurricanes and other disasters. Generac stock sank.
Estimates: FactSet consensus was for Generac earnings per share of $2.31, 65% above the year-ago quarter, with sales up 59% to $867 million.
Results: Generac earnings per share leapt 71% to $2.39 a share. Revenue climbed 68% to $900 million.
Outlook: Generac raised its full-year sales growth guidance to 47%-50% from 40%-45%. But it lowered the top end of its EBITDA margin forecast to 24.5%-25% from 24.5%-25.5%.
During the quarter, Wisconsin-based Generac also expanded its footprint in solar energy power generation and storage.
On July 6, the company said it bought Chilicon Power, a designer and provider of grid-interactive microinverter and monitoring solutions for the solar market. California-based Chilicon’s power inversion and monitoring technology maximizes PV production, lowers installation costs and allows for easy integration of a battery or a generator, providing tremendous flexibility for installers and end-users, Generac said in a statement.
Shares fell 11.6% to 387.80 on the stock market today. Generac stock is still well extended past a buy point from a double-bottom base after triggering the eight-week-hold rule. The stock is in profit-taking zone, according to MarketSmith chart analysis.
The Leaderboard stock is in a fourth-stage base. Such late-stage bases are less likely to succeed. However, Generac’s relative strength line is trending upward and hit an all-time high in recent weeks. Still, the stock may be due for a breather.
With a top-notch Composite Rating of 99, Generac leads IBD’s electrical-power/equipment group with a top-notch Composite Rating of 99. The group itself ranks No. 35 out of 197 industry groups.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
YOU MAY ALSO LIKE: