Generac expects jump in sales, earnings
Shares of Generac Holdings Inc. rose more than 19% Monday after the Town of Genesee maker of backup power-generation products said it expects a significant increase in business because of wide-scale power outages in the Midwest and East Coast.
President and Chief Executive Aaron Jagdfeld said Generac will see "a positive impact" in the third and fourth quarters. That business boost will continue into 2012, he said.
Generac previously had expected demand for residential standby generators to be flat year-over-year in the second half of this year. Now the company expects that residential product sales in the third quarter will increase year-over-year by more than 50%. In addition, the company expects that, in the fourth quarter, sales will be 15% to 20% higher compared with the year before.
"The duration and widespread impact of the most recent outage events around the nation was significant," Jagdfeld said. He added that the company has found that prolonged outages can drive awareness for the company's portable generators for 12 to 18 months after an event.
Generac also expects that sales of its commercial and industrial power generation products will grow by double digits as well.
Overall, Generac expects to see a "meaningful increase" in earnings for the third quarter of the year.
After its announcement, Generac's shares rose $3.02 to close at $18.59 on Monday.
Business Wire
Recent national business updates from the Associated Press