Industrial goods manufacturer
Generac Holdings Inc.
) is set to report third-quarter 2013 results before the opening
bell on Oct 24. In the last reported quarter, it delivered a
25.0% positive earnings surprise. Let's see how things are
shaping up for this announcement.
Factors to Consider
In the second quarter of 2013, Generac posted earnings per
share of 95 cents, reflecting an increase of 63.8% year over
year. Earnings were boosted by a hike in revenues as well as
margins during the quarter. The company recorded 45%
year-over-year rise in revenues to $346.7 million, driven by
increased demand from households for backup power and by the
acquisition of Ottomotores.
Based on the past performance, in 2013, the company expects to
record a 20% year-over-year increase in sales. Strong demand for
home standby and portable generators, and an improved outlook for
Commercial & Industrial shipments are likely to help the
company achieve its goal.
Generac has exhibited steady performance in surpassing
earnings expectations in the previous nine quarters. With the
acquisition of Ottomotores and Tower Light business, we expect
the company to prosper in its inorganic growth path, in addition
to an increase in core sales.
Our proven model shows that Generac is likely to beat earnings
as it has the appropriate combination of the following key
Positive Zacks ESP:
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +2.41%. This
indicates a likely positive earnings surprise.
Zacks Rank #3 (Hold):
This increases the predictive power of its ESP. The combination
of its Zacks Rank and Earnings ESP assures us of a positive
earnings surprise in the to-be-reported quarter.
Stocks with a Zacks Rank #1, 2 or 3 have significantly higher
chances of beating the earnings estimates. The sell-rated stocks
(#4 and 5) going into an earnings announcement should never be
Other Stocks to Consider
Other stocks in the electronic power sector that have both a
positive earnings ESP and a favorable Zacks Rank are:
), Earnings ESP of +10.53% and a Zacks Rank #2 (Buy).
), Earnings ESP of +1.67% and a Zacks Rank #2 (Buy).
Geospace Technologies Corporation
), Earnings ESP of +2.89% and a Zacks Rank #3 (Hold).
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