Generac Holdings Inc (GNRC) Reports Q3 2023 Earnings: Gross Profit Margin Increases to 35.1%
Generac Holdings Inc (NYSE:GNRC) reports Q3 2023 gross profit margin of 35.1%, up from 33.2% in Q3 2022.
Operating expenses decreased by $2.6 million, or 0.9%, compared to Q3 2022.
Free cash flow was $117.4 million, a significant increase from $(73.5) million in Q3 2022.
Company maintains full-year 2023 net sales guidance for a decline of approximately -10 to -12% compared to the prior year.
Generac Holdings Inc (NYSE:GNRC), a leading global designer and manufacturer of energy technology solutions and other power products, released its third quarter 2023 earnings report on November 1, 2023. The report highlighted a return to margin expansion and strong free cash flow generation.
Financial Highlights
Generac reported a gross profit margin of 35.1% for Q3 2023, compared to 33.2% in the prior-year third quarter. This increase was primarily driven by lower raw material and logistics costs and production efficiencies. Operating expenses decreased by $2.6 million, or 0.9%, compared to the third quarter of 2022. The provision for income taxes for the current year quarter was $19.4 million, or an effective tax rate of 24.3%, compared to $11.6 million, or a 16.1% effective tax rate, for the prior year.
The company generated $140.1 million in cash flow from operations during the third quarter, compared to $(56.0) million in the prior year. Free cash flow was $117.4 million, a significant increase from $(73.5) million in Q3 2022.
Business Segment Results
The Domestic segment total sales decreased 6% to $894.0 million compared to $946.6 million in the prior year quarter. The International segment total sales increased 14% to $207.6 million compared to $182.5 million in the prior year quarter.
2023 Outlook Update
Generac is maintaining its overall full-year 2023 net sales guidance for a decline of approximately -10 to -12% compared to the prior year. The company now expects net income margin to be approximately 5.0 to 6.0% for the full-year 2023 compared to the prior guidance range of 6.0 to 7.0%. The adjusted EBITDA margin is still expected to be approximately 15.5% to 16.5%, in line with the previous guidance.
About Generac Holdings Inc (NYSE:GNRC)
Generac is a leading energy technology company that provides backup and prime power systems for home and industrial applications, solar + battery storage solutions, smart home energy management devices and energy services, advanced power grid software platforms and engine- & battery-powered tools and equipment.
Explore the complete 8-K earnings release (here) from Generac Holdings Inc for further details.
This article first appeared on GuruFocus.
