Generac Holdings Inc. reported that widespread power outages caused by severe weather throughout the Midwest and the East Coast are creating increased sales for its backup power generators.
Commenting on recent business conditions, Aaron Jagdfeld, president and chief executive officer of Waukesha-based Generac, said, "The duration and widespread impact of the most recent outage events around the nation was significant. For Generac, the impact of such severe conditions not only increases the immediate demand for our portable generators, but our experience has been that prolonged outages can drive additional awareness for our home standby generators for a period of 12 to 18 months after an event. As a result, while we expect a significant positive impact on our third quarter financial results, it is also our expectation that we will see elevated demand for our home standby generators in the fourth quarter and into 2012."
Generac’s previous business outlook for residential products was for shipments to be flat year-over-year in the second half of 2011. As a result of the recent events, the company now expects that residential product sales in the third quarter of 2011 will increase year-over-year by more than 50 percent, driven primarily by portable generator shipments.
Additionally, the company now expects that residential product sales in the fourth quarter of 2011 will increase year-over-year by approximately 15 to 20 percent as a result of increased shipments of home standby generators, with demand for these products expected to remain strong into fiscal 2012 in the regions impacted by major outages.
Overall, Generac expects to see a meaningful increase in earnings for the third quarter of 2011 compared with its previous outlook.
