WAUKESHA, Wis. (AP) -- Generac Holdings Inc.'s shares soared Thursday after the generator maker revealed a much better-than-expected first-quarter profit and plans to issue a special dividend.
The series of intense storms recently has increased homeowner and business owner's interest in having backup power, which has benefited the Waukesha, Wis.-based company.
Generac earned $50.7 million, or 73 cents per share, for the quarter that ended March 31. That is compared with $30.1 million, or 44 cents per share, in the same quarter last year. It earned $1.21 per share for the period on an adjusted basis versus 96 cents per share.
Its revenue increased to $399.6 million from $294.6 million. That included a nearly 46 percent increase in residential sales and 21 percent increase in commercial and industrial sales.
The quarter's results far exceeded market expectations. Analysts polled by FactSet were anticipating earnings of 92 cents per share on revenue of $365.8 million.
"We believe that continued underinvestment in the electrical grid, an aging and more electrically dependent population and more severe and unpredictable weather will continue to drive additional awareness of the need for backup power," Aaron Jagdfeld, president and CEO of Generac, said in a statement. "We believe Generac is well positioned for future growth as a more balanced company with improved global focus."
Generac also said Thursday that it plans to issue a special cash dividend of up to $5 per share on its outstanding common stock. The company said it plans to reach a new $1.15 billion debt financing arrangement, the proceeds of which will be used to pay the dividend and refinance its credit facilities.
The company expects to pay the special cash dividend before the end of June but said that will not occur unless it gets favorable terms on the new debt.
Generac said it now expects revenue for the full year to increase at a low to mid-teens rate over the prior year, up from its prior forecast of a 10 percent increase. It expects revenue will increase 30 to 35 percent for its second quarter, year-over-year.
Shares soared more than 9 percent to $38.02 by early afternoon. The company's stock value has increased more than 55 percent in one year.