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Generac Holdings Inc. GNRC reported second-quarter 2025 adjusted earnings per share (EPS) of $1.65, which beat the Zacks Consensus Estimate of $1.33. GNRC reported adjusted EPS of $1.35 in the prior-year quarter.
Net sales were $1.061 billion, up 6% compared with $998 million reported in the prior-year quarter. The figure also beat the consensus estimate of $1.024 billion. The increases in both Residential product and Commercial & Industrial (“C&I”) product sales acted as catalysts.
Management also revised its expectations for 2025 owing to higher visibility, second-quarter outperformance and lower-than-expected price increases in the second half, mainly stemming from lower tariff assumptions.
For 2025, GNRC now expects revenues to increase 2-5% compared with the 0-7% rise guided earlier. Net income margin (before deducting for non-controlling interests) is now expected to be in the range of 7.5-8.5% compared with the 6.5-8.5% guided earlier. Adjusted EBITDA margin is estimated to be between 18% and 19% (previous projection being 17-19%). Due to the enactment of the One Big Beautiful Bill Act on federal income tax payments, GNRC now expects free cash flow conversion from adjusted net income to be 90% to 100% compared with the previous guided range of 70% to 90%.
GNRC expects its entry in the data-center vertical to be a strong business opportunity in the long term amid accelerating investment in data centers and the proliferation of artificial intelligence. In the second quarter, driven by a strong initial reception, the company has developed a significant global pipeline of opportunities and is now building a robust backlog for its new high-output diesel generator product.
GNRC is up 7.7% in the pre-market trading today. The stock has gained 1.4% compared with the Manufacturing-General Industrial industry’s growth of 1% in the past six months.
Segment-wise, domestic revenues rose 7% year over year to $884.5 million. Results were supported by acquisitions, which contributed 1% of the increase. Core sales were driven by higher demand for residential energy technology solutions, portable generators and C&I products sales to industrial distributors and national telecom customers, partly offset by ongoing weakness in C&I product shipments to national rental accounts.
International revenues surged 7% year over year to $197.2 million, which includes a 1% favorable impact from foreign currency fluctuations. Core revenue growth was mainly due to higher inter-segment sales and strength in C&I product shipments in Europe. Weaker shipments in other regions acted as a headwind.
Product-wise, revenues from Residential were up 7% year over year to $574 million. C&I revenues totaled $362 million, up 5% year over year. Revenues from the Other product class totaled $124.8 million, up 7.9% year over year.
The Zacks Consensus Estimate for Residential and C&I products’ second-quarter revenues was pegged at $557 million and $343 million, respectively.
Generac Holdings Inc. price-consensus-eps-surprise-chart | Generac Holdings Inc. Quote
Gross profit was $416.8 million, up from $375.6 million in the prior-year quarter, with respective margins of 39.3% and 37.6%. Despite an unfavorable sales mix, gross profit margin performance benefited from a favorable pricing mix and lower input expenses.
Total operating expenses were $305 million, up 12% year over year, caused by higher variable costs due to higher shipment volumes, increased employee costs and ongoing operating expenses related to recent acquisitions.
Operating income was $111.8 million, up 8.3% year over year. Adjusted EBITDA, before deducting for non-controlling interests, was $188 million compared with $165 million a year ago.
In the second quarter, the company generated $72 million of net cash from operating activities. Free cash flow totaled $14 million.
As of June 30, 2025, GNRC had $223.5 million of cash and cash equivalents, with nearly $1.29 billion of long-term borrowings and finance-lease obligations.
In the reported quarter, the company repurchased shares worth $50 million. GNRC had shares worth $200 million left under its buyback authorization as of June 30, 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.
Generac currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Otis Worldwide Corporation OTIS reported mixed results in the second quarter of 2025, wherein adjusted earnings beat the Zacks Consensus Estimate while net sales missed the same. On a year-over-year basis, the top and bottom lines tumbled. The quarterly results were impacted by a soft sales trend in the New Equipment segment, partially offset by year-over-year growth in contributions from the Service segment. OTIS’ Service segment grew, driven by increased trends in organic maintenance and repair sales and organic modernization sales, supporting the overall performance.
Dover Corporation DOV reported second-quarter 2025 adjusted EPS from continuing operations of $2.44, beating the Zacks Consensus Estimate of $2.39. In the year-ago quarter, the company reported an adjusted EPS of $2.10 (excluding after-tax purchase accounting expenses and after-tax gain on disposition of a minority-owned equity method investment). On a reported basis, Dover has delivered an EPS of $1.74 in the quarter, down 15% year over year.
Dover’s revenues in the second quarter increased 5.2% year over year to $2.05 billion. The top line beat the Zacks Consensus Estimate of $2.04 billion. Organic growth was 1% in the quarter.
Graco Inc.’s GGG second-quarter 2025 adjusted earnings of 75 cents per share missed the Zacks Consensus Estimate of 78 cents. The bottom line decreased 3% year over year. The company’s net sales of $571.8 million missed the consensus estimate of $585 million. However, Graco’s top line increased 3% year over year due to incremental sales from acquired operations and sales growth across the EMEA and Asia Pacific regions. On a regional basis, quarterly sales generated from the Americas decreased 3% year over year. In Europe, the Middle East and Africa, sales increased 19% year over year. Sales from the Asia Pacific increased 12% year over year.
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This article originally published on Zacks Investment Research (zacks.com).
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