Loading...
•
Jun 30, 2020
Generac Q2 2020 Earnings Report
Generac's Q2 2020 earnings dramatically exceeded expectations, driven by substantial growth in residential products and an emerging "Home as a Sanctuary" trend.
Key Takeaways
Generac reported record second-quarter results, with net sales increasing to $546.8 million and net income attributable to the Company reaching $66.1 million, or $1.02 per share. The company's performance was primarily driven by robust demand for home standby generators, leading to an increase in the full-year 2020 sales growth guidance to approximately 5 to 8%.
Net sales increased to $546.8 million, compared to $541.9 million in the prior-year second quarter.
Residential product sales increased 27.2% to $341.4 million, while Commercial & Industrial product sales decreased 32.8% to $154.9 million.
Net income attributable to the Company was $66.1 million, or $1.02 per share, compared to $62.0 million, or $0.98 per share, for the same period of 2019.
The Company is increasing its full-year 2020 sales growth guidance to now be approximately 5 to 8% of positive year-over-year growth.
Generac
Generac
Generac Revenue by Segment
Generac Revenue by Geographic Location
Revenue by Segment
Residential Products Revenue
CapyFin.comCommercial & Industrial Products Revenue
CapyFin.comRevenue by Geographic Location
Domestic Revenue
CapyFin.comInternational Revenue
CapyFin.com Forward Guidance
The Company is raising its prior guidance for revenue growth for full-year 2020, and now expects an increase of approximately 5 to 8% compared to the prior year. Adjusted EBITDA margin is now expected to be approximately 21.5 to 22.0%.
Positive Outlook
- Residential products benefitting from the emerging “Home as a Sanctuary” trend.
- Backup power for residential applications has now become more important than ever.
- Residential products have historically proven to be more resilient and tend to decouple from the broader economic environment.
- Demand is more driven by power outages.
- Net income margin, before deducting for non-controlling interests, is now expected to be approximately 12.0 to 12.5% for the full-year 2020
Challenges Ahead
- Impact of the COVID-19 pandemic on global C&I products is particularly severe.
- Guidance assumes a level of power outages in line with the longer-term baseline average.
- Guidance assumes the benefit of one significant power shut-off event in California.
- Guidance assumes a recovery of the solar market in the second half of the year.
- There remains a high degree of uncertainty around the magnitude and timing of an economic recovery
Revenue & Expenses
Visualization of income flow from segment revenue to net income