Generac Holdings Inc GNRC reported first-quarter 2025 adjusted earnings per share (EPS) of $1.26, which beat the Zacks Consensus Estimate of 99 cents. GNRC reported adjusted EPS of 88 cents in the prior-year quarter.
Net sales were $942 million, up 6% compared with $889 million reported in the prior-year quarter. The figure also beat the consensus estimate of $918.7 million. The increase in Residential product sales offset soft Commercial & Industrial (“C&I”) product sales. Higher demand for home standby generators amid increasing power outage activity was the primary tailwind. Increasing residential energy technology sales was another growth driver.
However, management revised its expectations for 2025 owing to the impact of trade policy and macroeconomic uncertainty on near-term visibility. GNRC is implementing higher pricing, supply-chain and other cost reduction initiatives to alleviate the impact of tariffs. The company also assumes that current tariff levels will remain in place for the rest of the year.
For 2025, GNRC now expects revenues to increase 0-7% (including 1% favorable impact from foreign currency and acquisitions) compared with the 3-7% rise guided earlier.
Net income margin (before deducting for non-controlling interests) is now expected to be in the range of 6.5-8.5% compared with the 8-9% guided earlier. Adjusted EBITDA margin is estimated to be between 17% and 19% (previous projection being 18-19%). GNRC continues to expect to generate strong levels of free cash flow in 2025.
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The stock has lost 18.5% compared with the Manufacturing-General Industrial industry’s decline of 9.5%. (See the Zacks Earnings Calendar to stay ahead of market-making news.)
GNRC’s Segments in Detail
Segment-wise, Domestic revenues increased 9% year over year to $782.3 million. Results were aided by acquisitions (contributing a 2% increase). Core sales were up 7%, driven by increased shipments of home standby generators, energy technology solutions and C&I product shipments to national telecom customers and industrial distributors.
International revenues fell 0.6% year over year to $185.5 million, which includes a 5% unfavorable impact from foreign currency fluctuations. Core revenue growth of 5% was mainly due to higher residential product shipments in Latin America, partly offset by weaker C&I shipments across most end markets, globally.
Generac Holdings Inc. Price, Consensus and EPS Surprise
Generac Holdings Inc. Price, Consensus and EPS Surprise
Generac Holdings Inc. price-consensus-eps-surprise-chart | Generac Holdings Inc. Quote
Product-wise, revenues from Residential surged 15% year over year to $494 million. C&I revenues totaled $337 million, down 5% year over year. Revenues from the Other product class totaled $110.6 million, up 4% year over year.
The Zacks Consensus Estimate for Residential and C&I products’ first-quarter revenues was pegged at $484 million and $325 million, respectively.
GNRC’s Margin Performance
Gross profit was $372 million, up from $316.4 million in the prior-year quarter, with respective margins of 39.5% and 35.6%. Gross profit margin performance benefited from a favorable sales mix and lower input expenses.
Total operating expenses were $288.3 million, up 15.6% year over year, due to higher employee costs, marketing spending and ongoing operating expenses related to recent acquisitions.
Operating income was $83.6 million, up 25% year over year. Adjusted EBITDA, before deducting for non-controlling interests, was $150 million compared with $127 million a year ago.
GNRC’s Cash Flow & Liquidity
In the first quarter, the company generated $58 million of net cash from operating activities. Free cash flow totaled $27 million.
As of March 31, 2025, GNRC had $187.5 million of cash and cash equivalents, with nearly $1.19 billion of long-term borrowings and finance-lease obligations.
In the reported quarter, the company repurchased shares worth $97 million. GNRC had shares worth $250 million left under its buyback authorization as of March 31, 2025.
In February 2024, GNRC approved a new share buyback authorization that allows for a repurchase of up to $500 million in the next 24 months. It replaced the remaining balance on the earlier program.
GNRC’s Zacks Rank
Generac currently has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Performance of Other Companies in the Same Space
Kadant Inc. KAI reported first-quarter 2025 adjusted earnings of $2.10 per share that beat the Zacks Consensus Estimate of $1.97. The metric declined 11.8% from the year-ago figure. Kaidant’s revenues were $239.2 million, which decreased 3.9% year over year. However, the figure beat the Zacks Consensus Estimate of $238.9 million. Shares of Kaidant are up 12.6% in the past year.
Dover Corporation DOV reported first-quarter 2025 adjusted EPS from continuing operations of $2.05, beating the Zacks Consensus Estimate of $1.99. In the year-ago quarter, Dover reported an adjusted EPS of $1.72 (excluding after-tax purchase accounting expenses and after-tax gain on disposition of a minority-owned equity method investment). Total revenues in the first quarter decreased 0.9% year over year to $1.87 billion. The top line missed the Zacks Consensus Estimate of $1.88 billion. Organic growth was 1% in the quarter. Shares of Dover Corporation are down 6% in the past year.
Graco Inc.’s GGG first-quarter 2025 adjusted earnings of 70 cents per share beat the Zacks Consensus Estimate of 68 cents. The bottom line increased 8% year over year. Graco’s net sales of $528.3 million beat the consensus estimate of $525 million. The top line increased 7% year over year due to higher demand in all the segments. On a regional basis, quarterly sales generated from the Americas increased 5% year over year. In Europe, the Middle East and Africa, sales increased 9% year over year. Sales from the Asia Pacific increased 13% year over year. Shares of Graco are down 0.1% in the past year.
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