Generac Stock Is Falling. Hurricane Season Didn’t Cooperate.

Generac stock was down after earnings. (Dreamstime)

Key Points

• Generac reported third-quarter earnings per share of $1.82 on sales of $1.1 billion, missing analyst expectations.
• The company revised its 2025 sales outlook to flat, down from a prior guidance of 2% to 5% growth.
• Generac’s Ebitda profit margin guidance for 2025 was lowered to 17% from the previous 18% to 19% range.

A weak hurricane season in the U.S. certainly isn’t a bad thing, but it led backup generator maker Generac to cut its outlook for the year. It’s a reminder that sometimes, good news can be bad news for business.

Generac, on Wednesday, reported third-quarter earnings per share of $1.82 from sales of $1.1 billion. Wall Street was looking for EPS of $2.18 and sales of $1.2 billion, according to FactSet.

A year ago, in the third quarter of 2024, Generac reported EPS of $2.25 from sales of $1.2 billion.

Looking ahead, the company expects flat sales in 2025. The prior guidance called for growth of 2% to 5%. Earnings before interest, taxes, depreciation, and amortization, or Ebitda, profit margins are expected to be 17%. The prior guidance range was 18% to 19%.

Wall Street was projecting 2% sales growth and Ebitda profit margins of about 18%.

Generac shares dropped 4.9% to $180.86 on Wednesday, while the S&P 500 finished flat and the Dow Jones Industrial Average dropped 0.2%.

Coming into Wednesday trading, Generac stock was up 23% this year.

“Home standby and portable generator shipments grew sequentially in the quarter but were below expectations as a result of a power outage environment that was significantly below baseline average and the lowest third quarter of total outage hours since 2015,” said CEO Aaron Jagdfeld.

Many factors can drive outages, but hurricane season tends to drive demand for standby power generation.

“This softer seasonal demand was partially offset by robust growth in our shipments of residential energy technology products and a strong increase in global [commercial] product sales,” added Jagdfeld. “The third quarter also included initial shipments of our new large-megawatt generators to the data center market, and we continue to rapidly develop a pipeline of opportunities with our backlog for these products doubling over the last 90 days.”

AI data centers weren’t enough to save the current quarter, though.

Write to Al Root at allen.root@dowjones.com