Generac beats quarterly estimates on robust sales of power backup equipment
Demand for the company's home standby generators has risen in tandem with power outages caused by winter storms and hurricanes last year.
CEO Aaron Jagdfeld said there was a "dramatic" increase in the sales of Generac's residential segment after shipments to Puerto Rico rose following widespread blackouts.
Sales in the residential segment, its biggest in terms of sales, were up 6.6% from a year ago.
Jagdfeld also said demand from the company's industrial and telecom customers remains strong and that there was a "strong initial reception" to its entry into the power-hungry data centre market during the quarter.
The Waukesha, Wisconsin-based company's commercial and industrial (C&I) business segment posted a 5.2% rise in quarterly sales from a year ago.
Its total net sales for the quarter ended June 30 was $1.06 billion, beating estimates of $1.03 billion, according to data compiled by LSEG.
Gross profit margin in the second quarter was 39.3%, compared with 37.6% a year ago.
It expects full-year net income margin to range between 7.5% and 8.5%, compared with previous guidance range of 6.5% to 8.5%.
But Generac narrowed its annual net sales growth forecast to between 2% and 5%, from its prior guidance of flat to 7%, citing lower than anticipated price increases in the second half of the year due to tariffs.
Adjusted quarterly net income per share came in at $1.65, above analysts' expectations of $1.32.
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