Earlier this week, we said, “We’re being handed another opportunity, as GNRC begins to break higher. Last trading at $156.96, we’d like to see GNRC race to $170 near term.”
Not only was it our top hurricane trade idea, but it was also our top heat wave trade idea.
After all, dangerous heat can often lead to blackouts, which can lead to bigger demand for power generators provided by companies like Generac Holdings.
Just a couple of days later, GNRC rocketed about $30 higher to $181 thanks to strong earnings.
In its latest report, the company reported net sales of $1.06 billion, up 6% from a year earlier and above estimates of $1.02 billion. Adjusted earnings came in at $1.65 per share, topping projections of $1.32 per share. Net income rose to $74 million, or $1.25 per share, compared with $59 million, or $0.97 per share, in the same quarter last year.
Aaron P. Jagdfeld, CEO, added that “our second quarter results exceeded our expectations, driven primarily by C&I product sales to our industrial distributors as well as increased shipments of residential energy storage systems.” He highlighted that adjusted EBITDA margins were “well ahead of our prior forecast,” citing strong gross margin performance and improved operating leverage. Net sales increased 6% year-over-year to $1.06 billion, with residential product sales up 7% and C&I product sales up 5%.
If you did jump into GNRC on our mention, congratulations on the quick win.
Sincerely,
Ian Cooper
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