By Senad Karaahmetovic
Generac (NYSE:GNRC) reported mixed fourth-quarter results as it continues to witness weakness in the residential business. Shares are up nearly 1% in premarket hours.
The company reported an adjusted EPS of $1.78 on revenue of $1.05 billion, beating the average analyst consensus for earnings of $1.77 on sales of $1.07B. Net sales fell 1.7% year-over-year, dragged by a 19% drop in sales of residential products. This drop was partially offset by a 27% increase in the commercial and industrial products business, which is the smaller of the two.
"Fourth quarter and full year 2022 results came in at the low end of our prior expectations due to continued softness in residential products," said Aaron Jagdfeld, President and Chief Executive Officer.
Generac guided to a 6-10% drop in full-year sales. Net income margin is expected to be 7.5-8.5% for the full 2023.
The company also introduced 2023 EBITDA guidance at $735 million at the mid-point, above the consensus of $715M. Revenue is seen at $4.2B at the mid-point, again higher than the consensus of $4.18B.
Oppenheimer analysts commented:
"GNRC's 2023 guidance operating midpoints were modestly below expectations for revenue and EBITDA margins, with moderate incremental below-line pressure indicated by net income margin guidance. We see decent balance in overall results, but with some wide underlying variances."