Back to top

Image: Bigstock

Factors to Note Ahead of Generac's (GNRC) Q2 Earnings Release

Read MoreHide Full Article

Generac Holdings Inc (GNRC - Free Report) will report second-quarter 2024 results on Jul 31 before the opening bell.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $1 billion, up 0.2% from the prior-year reported number. The Zacks Consensus Estimate for earnings is pegged at $1.24 per share, up 14.8% year over year.

GNRC beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average earnings surprise of 5.8%. In the past year, shares of the company have gained 2.7% against the sub-industry’s decline of 6.5%.

Zacks Investment Research
Image Source: Zacks Investment Research

Factors at Play

Generac’s second-quarter performance is likely to have been boosted by momentum in home standby generators. Ecobee has been gaining momentum in the smart thermostat market owing to the expansion of partnerships with important retail partners. Healthy adoption of Ecobee products is expected to have contributed to top-line expansion in the to be reported quarter.

Generac Holdings Inc. Price and EPS Surprise

Generac Holdings Inc. Price and EPS Surprise

Generac Holdings Inc. price-eps-surprise | Generac Holdings Inc. Quote

However, softness in portable generator shipments and downward trends in domestic energy storage and EV markets are likely to have weighed on residential product sales.

The Zacks Consensus Estimate for Residential products' revenues is pegged at $542 million, up 8.6% year over year.

Shipments of C&I generators through the North American distributor channel are picking up pace. This is anticipated to have acted as another tailwind. However, weakness in sales to domestic telecom and national equipment rental customers remains a concern. The Zacks Consensus Estimate for C&I products' revenues is pegged at $338 million, down 11.9% year over year.

Margin performance is likely to have been buoyed by a favorable sales mix (due to solid home standby shipments), enhanced production efficiencies, reduced input costs and higher pricing.

Volatile macroeconomic conditions, stiff competition, along with increasing operating costs (mainly due to higher marketing spending and research and development expenses) remain concerning for Generac.

Earnings Whispers

Our proven model does not predict an earnings beat for Generac this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. This is not the case here.

Generac has an Earnings ESP of -4.11% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Western Digital Corporation (WDC - Free Report) has an Earnings ESP of +31.75% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

WDC is scheduled to report quarterly earnings on Jul 31. The Zacks Consensus Estimate for WDC’s to-be-reported quarter’s EPS and revenues is pegged at $1.26 and $3.77 billion, respectively. Shares of WDC have gained 59.5% in the past year.

Marriott International, Inc (MAR - Free Report) has an Earnings ESP of +6.24% and currently carries a Zacks Rank #2. MAR is scheduled to report quarterly earnings on Jul 31.

The Zacks Consensus Estimate for MAR’s to-be-reported quarter’s EPS and revenues is pegged at $2.49 and $6.44 billion, respectively. Shares of MAR have gained 19.4% in the past year.

Kinross Gold Corporation (KGC - Free Report) has an Earnings ESP of +8.04% and a Zacks Rank #2 at present. KGC is set to report quarterly figures on Jul 31.

The Zacks Consensus Estimate for KGC’s to-be-reported quarter’s EPS and revenues is pegged at 13 cents and $1.02 billion, respectively. Shares of KGC have surged 79% in the past year.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in