Generac Holdings Inc. (GNRC) witnessed a more than 3% drop in premarket trading on Wednesday following the release of its quarterly earnings report. The company, renowned for its generators and backup power systems, reported both positive and negative figures for the quarter, while also highlighting a challenging consumer landscape.
In the second quarter, Generac recorded a net income of $45 million, equivalent to 70 cents per share. This stood in stark contrast to the year-ago quarter, which saw net income of $156 million, or $2.21 per share. On an adjusted basis, the company’s earnings decreased to $1.08 per share from the previous year’s $2.86 per share. Analysts surveyed by FactSet had estimated earnings of $1.16 per share.
Net sales also experienced a decline, falling from $1.29 billion in the previous year to $1.00 billion in the second quarter. Despite this, analysts had anticipated a lower figure of $980 million.
While discussing these results, Chief Executive Aaron Jagdfeld acknowledged that the decline was expected due to the outstanding performance of the prior year, which included a significant reduction in backlog for home standby generators. Furthermore, he expressed concerns regarding the current consumer environment, indicating that it is softer than previously anticipated. However, Jagdfeld emphasized that the long-term trends driving awareness for backup power solutions remain compelling.
Generac Holdings Inc. remains committed to addressing market challenges and delivering reliable backup power options, aiming to capitalize on the enduring demand for such solutions.