Generac Holdings (GNRC) Tops Q2 EPS by 21c

Generac Holdings (NYSE: GNRC) reported Q2 EPS of $1.11, $0.21 better than the analyst estimate of $0.90. Revenue for the quarter came in at $494.9 million versus the consensus estimate of $448.41 million.

Updated 2018 Outlook

The Company is increasing its prior guidance for revenue growth for full-year 2018 due to improving end-market conditions and the closing of the Selmec acquisition. Full year net sales are now expected to grow between 13 to 14% over the prior year, which is an increase from the 6 to 8% growth previously expected. Core sales growth is expected to be approximately 10%, which is an increase from the 5 to 6% growth previously expected. This top-line guidance assumes no “major” outage events and a baseline power outage severity level similar to the longer-term average for the remainder of the year. Should the baseline power outage environment in 2018 be higher, or if there is a “major” event during the year, the Company could exceed these expectations.

Given the increase in net sales guidance, net income margins, before deducting for non-controlling interests, are now expected to be approximately 10.5% for the full-year 2018, which is an increase from the 9.5 to 10.0% guidance previously expected. Adjusted EBITDA margins, also before deducting for non-controlling interests, are now expected to be approximately 20.0% for the year, up from the prior 19.0 to 19.5% guidance.

Operating and free cash flow generation is expected to remain strong, with the conversion of adjusted net income to free cash flow still forecasted to be over 90%.

For earnings history and earnings-related data on Generac Holdings (GNRC) click here.

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