Generac stock falls as generator maker misses Wall Street earnings estimates
fell Tuesday after the generator maker posted quarterly results and sales that slightly exceeded Wall Street expectations due to supply chain problems.
Adjusted earnings for the third quarter were $2.35 per share, up from $2.08 a year earlier, but slightly lower than analysts’ estimates of $2.37 per share. Third quarter revenue was $942.7 million, excluding a consensus of $961.1 million.
The stock fell 3.12% to $490.04 Tuesday. Shares were down nearly 10% before trading.
“As expected, supply chain and inflation factors impacted margins, albeit slightly more acutely than expected; they’ve also somewhat closed off sales,” Oppenheimer analysts said in a note.
The analysts rate the stock on Outperform with a price target of $500.
Generac (ticker: GNRC) maintained its forecast for 2021 net sales growth of approximately 47% to 50% from the prior year. The adjusted EBITDA margin guideline was reduced to 23.5% from the previous range of 24.5% to 25.0%.
Gross margin in the quarter was 35.6% versus Oppenheimer’s estimate of 37.1%, “due to inflation, logistics and plant startup costs, partially offset by early effects of recent price action,” Oppenheimer said.
“In addition to the long-established significant revenue growth prospects in 2022, GNRC sees the full impact of price action and cost initiatives driving growing margins in 2022,” the analyst added.
The residential generator manufacturer also said it was acquiring Toronto-based smart thermostat manufacturer Ecobee for $770 million.
Generac also announced the expansion of its Trenton, South Carolina facility. The move will expand the company’s distribution capacity in the southeastern United States.
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