Generac Enjoys 7.6 Percent Year over Year Revenue Hike in Q2
Generac Holdings reported $395.4 million in net sales for the second quarter of 2017, compared to $367.4 million for the second quarter of 2016, a 7.6-percent climb, including a $9.5 million contribution from the acquisition of Motortech.
Net income attributable to the power generation equipment manufacturer was $25.7 million or $0.41 per share compared to $20.9 million in the year-ago quarter.
Commercial and industrial product sales improved 8.9 percent to $170.8 million compared to $156.7 million in the year-ago quarter. Residential product sales jumped 9 percent to $198.1 million compared to $181.7 million in the year-ago frame.
Gross profit margin was 34 percent compared to 33.8 percent in last year’s second quarter.
“We are pleased with our second quarter results with strong organic sales growth compared to the prior year leading to an improvement in overall earnings and cash flow,” said Aaron Jagfeld, president and CEO. “Shipments of home standby generators in particular were very strong in the quarter as higher power outage activity and targeted marketing in the first half drove increased activations as every region in the U.S. experienced solid double digit growth year over year. Demand for our mobile products domestically also continued to be much stronger as compared to the growth year over year. Demand for our mobile products domestically also continued to be much stronger as compared to the prior year, as our rental equipment customers further replaced and upgraded their fleets during the quarter.”
Domestic segment sales leaped 6.7 percent to $305.9 million compared to $286.7 million a year ago, with strong growth in shipments of home standby generators and mobile products. The strength was partially offset by a drop in residential portable sales. International segment sales, primarily commercial and industrial products, increased 10.9 percent to $89.5 million compared to $80.7 million a year ago, primarily because of the recent acquisition of Motortech, which closed Jan. 1.
Generac is increasing its previous guidance for revenue growth for the full year because of an improved outlook for domestic mobile products, as well as higher international segment sales from a stronger Euro relative to the U.S. dollar. The company expects full year net sales to jump between 6 to 8 percent.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.