Generac shares hit record high on generator demand
WAUKESHA, Wis. (AP) — Shares of the generator maker surged to an all-time high after trading finally opened on the New York Stock exchange and investors scrambled to get a stake in the company in the wake of Hurricane Sandy, which has left huge swaths of the country without power.
On top of strong quarterly earnings Wednesday, the company boosted its full-year outlook because of the storm and the expected run on generators in numerous states.
Storms that struck the East Coast just once every generation have, at least in the past couple of years, have been arriving like clockwork in the fall.
"As a result of the increased awareness these outage events provide, adoption rates for home standby and light commercial generators have accelerated over the last several years," said CEO Aaron Jagdfeld.
Shares of the company, based in Waukesha, Wis., spiked 18 percent before noon.
Shipments for home generators increased throughout the third quarter and the company saw the same for a number of products from commercial and industrial markets.
In the most recent quarter, the company took a hit from higher interest expenses tied to a recent refinancing of its senior credit facilities and a change in its tax rate.
The company reported net income of $25.5 million, or 37 cents per share, for the quarter that ended Sept. 30. That's down from $37.4 million, or 55 cents per share, earned in the same quarter last year. It earned 78 cents per share on an adjusted basis versus 75 cents per share last year.
However, Generac's revenue, which markets were keying in on, increased nearly 26 percent to $300.6 million from $239.3 million.
Analysts polled by Factset had expected the company to earn 68 cents per share on an adjusted basis and deliver revenue of $290.8 million.
The company now expects to earn $2.95 to $3 per share this year on an adjusted basis, versus its prior forecast of $2.65 to $2.70 per share. Analysts were expecting $2.09 per share for the year.
Shares rose $5.12 to $33.45 in early trading. The stock price has more than doubled in the past five years.
