Generac Holdings Inc GNRC reported third-quarter 2024 adjusted earnings per share (EPS) of $2.25, which beat the Zacks Consensus Estimate of $1.98. GNRC reported adjusted EPS of $1.64 in the prior-year quarter.

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Net sales came in at $1.17 billion, up 10% compared with $1.07 billion reported in the prior-year quarter. The figure also beat the consensus estimate by 1.3%. The increase in Residential product sales offset a decline in Commercial & Industrial (C&I) product sales. Increasing power outage activity led to higher shipments of home standby and portable generators. 

In the quarter under review, core sales growth (excluding the impact of acquisitions and foreign currency) was up 9% year over year.

Generac Holdings Inc. Price, Consensus and EPS Surprise

Generac Holdings Inc. price-consensus-eps-surprise-chart | Generac Holdings Inc. Quote

GNRC updated its sales expectations for 2024 owing to recent power outage activity, including the impact of Hurricane Helene and Hurricane Milton. GNRC expects an “outsized increase” in the Residential product division to partly offset weakness in the C&I business and Other product sales in certain end markets and geographies. 

For 2024, GNRC now expects revenues to increase 5-9% compared with the earlier guidance of 4-8%.

Net income margin (before deducting for non-controlling interests) is now anticipated between 7% and 8% compared with the earlier guided range of 6.5-7.5%. Adjusted EBITDA margin is estimated to be 17.5-18.5% compared with the previous guidance of 17-18%.

Shares of GNRC are down 1% in the pre-market trading on Oct. 31. The stock has gained 96.4% compared with the sub-industry’s decline of 34.9%.

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GNRC’s Segments in Details

Segment-wise, Domestic revenues increased 14% year over year to $1.02 billion. Results were aided by increased shipments of home standby and portable generators and higher C&I product sales to industrial distributors. This was mostly offset by reduced C&I shipments to telecom, rental and “beyond standby” applications.

International revenues fell 20% year over year to $166.7 million, which includes a slight unfavorable impact from foreign currency fluctuations. Core revenues declined due to weak inter-segment sales (owing to softness in the telecom market) and reduced portable generator shipments in Europe.

Product-wise, revenues from Residential surged 28% year over year to $723 million. C&I revenues totaled $328 million, down 15% year over year. Revenues from the Other product class totaled $122.8 million, up 1.5% year over year.

The Zacks Consensus Estimate for Residential and C&I products’ third-quarter revenues was pegged at $688 million and $349 million, respectively.

Margins of GNRC

Gross profit was $472.3 million, up from $375.8 million in the prior-year quarter, with respective margins of 40.2% and 35.1%. Gross profit margin performance gained from a favorable sales mix and lower input expenses.

Total operating expenses were $303.6 million, up 12% year over year, due to higher employee costs and marketing spending, and higher variable expenses and incentive compensation.

Operating income came in at $168.6 million, up 60.9% year over year. Adjusted EBITDA, before deducting for non-controlling interests, was $232 million compared with $189 million a year ago.

GNRC’s Cash Flow & Liquidity

In the third quarter, the company generated $212 million of net cash from operating activities. Free cash flow totaled $184 million.

As of Sept. 30, 2024, GNRC had $214.2 million of cash and cash equivalents, with nearly $1.361 billion of long-term borrowings and finance lease obligations.

In the reported quarter, the company repurchased shares worth $102 million. GNRC had shares worth $347 million left under its buyback authorization as of Sept. 30, 2024. 

In February 2024, GNRC 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.

Zacks Rank of GNRC

Generac currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Performance of Other Companies in Tech Space

Seagate Technology Holdings plc STX reported first-quarter fiscal 2025 non-GAAP earnings of $1.58 per share, beating the Zacks Consensus Estimate by 6.8%. The company reported a non-GAAP loss of 22 cents per share in the year-ago quarter. This improvement in the bottom line was driven by a favorable mix shift to mass-capacity products and a better pricing environment. Non-GAAP revenues of $2.168 billion beat the Zacks Consensus Estimate by 2.4%. The figure increased 49% on a year-over-year basis and 15% sequentially. Shares of STX have gained 46.1% in the past year.

Badger Meter, Inc (BMI) reported EPS of $1.08 for the third quarter of 2024, beating the Zacks Consensus Estimate by 5.9%. Quarterly net sales were $208.4 million, up 12% from $186.2 million in the year-ago quarter. This uptick resulted from continued strong yet normalizing demand for its tailorable water management solutions. Shares of BMI have gained 47.9% in the past year. 

Iridium Communications IRDM reported EPS of 21 cents for the third quarter of 2024, beating the Zacks Consensus Estimate by 5%. The company incurred a loss of a cent per share in the prior-year quarter. Quarterly revenues were $212.8 million, up 8% from the year-ago level, driven by strength across all three segments. The Zacks Consensus Estimate was pegged at $205.7 million. Shares of IRDM have lost 20.4% in the past year.

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