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>>> Generac Stock Is Spiking. It Expects ‘Exceptional Revenue Growth’ in 2022.


Barron's

By Sabrina Escobar

Feb. 16, 2022


https://www.barrons.com/articles/generac-gnrc-stock-earnings-revenue-forecast-51645020931?siteid=yhoof2


Shares of Generac Holdings GNRC-2.66% were surging Wednesday after the generator maker’s 2022 outlook energized investors.

“The company is initiating guidance for 2022 that anticipates another year of exceptional revenue growth as compared to the prior year,” the company said on Wednesday in its fourth-quarter earnings release.

Generac said it believes net sales will increase between 32% and 36% from the previous year, driven by increasing home standby production capacity, growth in clean energy markets, recent acquisitions, and strong global demand. The net income margin is expected to be approximately 13% to 14% for 2022.

Investors also cheered the company’s solid fourth-quarter performance. Generac reported adjusted earnings of $2.51 a share on $1.07 billion in revenue. Analysts surveyed by FactSet were expecting earnings of $2.42 a share on revenue of $1.02 billion.

For the fiscal year, net sales increased 50% to a record $3.75 billion in 2021, topping forecasts for $3.69 billion. Adjusted earnings were $9.63 a share, beating estimates for $9.59.

“We’re proud of our execution during the quarter as the continued progress on our capacity expansion helped drive top line results ahead of our expectations despite ongoing supply chain challenges,” said CEO Aaron Jagdfeld.

Generac’s gross profit margin was 34% for the quarter, compared to 39.4% in the year-earlier quarter. Margins were compressed by supply-chain constraints and inflationary pressures that drove up prices for commodities, labor, logistics, and starting up new plants. The costs were partially offset by pricing changes that were first implemented last year and will be fully realized throughout 2022, the company said.

Domestic sales increased 39%, while international sales increased 47%, with acquisitions contributing about 21% of revenue growth in the segment for the quarter.

Generac shares were rising 12.2% to $310.46 on Wednesday.

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