Generac stock tumbles toward 2-year low after big profit and sales misses, lowered outlook

Shares of Generac Holdings Inc.
GNRC,
-24.32%
sank 10.7% toward a more than two-year low in premarket trading Wednesday, after the maker of home and industrial power systems reported third-quarter profit and sales that fell well below expectations and cut its full-year outlook, citing disappointing residential sales. Net income fell to $58 million, or 83 cents a share, from $132 million, or $1.93 a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of $1.75 missed the FactSet consensus of $3.22. Sales increased 15% to $1.09 billion but were below the FactSet consensus of $1.34 billion. For 2022, the company cut its sales growth outlook to 22% to 24% from 36% to 40% and its net income margin guidance to 9% to 10% from 13% to 14%. “[I]nstallation capacity for home standby generators continued to grow but still lagged our production output during the third quarter,” said Chief Executive Aaron Jagdfeld. “This has resulted in higher field inventory levels and lower home standby generator orders from our channel partners than previously expected even as end customer demand continues to be strong driven by elevated power outages, most notably from Hurricane.” The stock, which is on track to open at the lowest price seen during regular-session hours since July 2020, has tumbled 35.9% over the past three months through Tuesday, while the S&P 500
SPX,
-1.04%
has lost 5.5%.