Generac Stock Gains On Q4 Earnings Beat

Generac Holdings Inc GNRC reported fourth-quarter FY21 sales growth of 40.6% year-on-year, to $1.07 billion, beating the analyst consensus of $1.02 billion.
Residential product sales grew 42% to $706 million, and Commercial & Industrial (C&I) product sales increased 43% to $284 million.
Domestic segment sales increased 39% to $896.4 million, and the International segment sales rose 47% to $170.7 million.
Adjusted EPS of $2.51 beat the analyst consensus of $2.40.
The gross profit increased to $362.5 million, while the gross profit margin contracted by 540 basis points Y/Y to 34%, pressured by a challenging supply chain and overall inflationary environment leading to higher input costs.
Operating expenses increased by 44.8% Y/Y to $187.1 million. The operating margin was 16.4%, and operating income for the quarter rose 2.6% to $175.5 million. Adjusted EBITDA of $220 million increased 12.2% Y/Y.
Cash flow from operations totaled $62 million with a free cash flow of $42 million. The company held $147.3 million in cash and equivalents as of December 31, 2021.
Outlook: Generac expects net sales to increase 32% - 36% on an as-reported basis, including approximately 5% - 7% of net impact from acquisitions and foreign currency.
The company expects an FY22 net income margin of 13% – 14% and adjusted EBITDA margin to be 22% - 23%.
Price Action: GNRC shares are trading higher by 6.49% at $294.65 on the last check Wednesday.

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