Continued extreme weather to drive demand: Generac CEO

Generac (GNRC) CEO Aaron Jagdfeld joins Seana Smith and Madison Mills on Catalysts to discuss how Hurricane Milton has contributed to increased demand for the generator manufacturer’s products. The company’s stock reached a 52-week high this week as the extreme weather conditions drive up generator demand. Jagdfeld tells Yahoo Finance, “We have been seeing obviously elevated demand and I think it's more the nature of the back-to-back-to-back [storms]. We had a very early storm barrel in early July, and then we had Helene a couple of weeks ago. And now, with Milton right on the heels of Helene, obviously, the demand grows with each event.” He says, “There's a tremendous amount of damage, but a lot of power outages as well. I mean, there's still about 3.5 million homeowners that are disconnected yet this morning across Florida. So obviously, that's a that's a significant situation for many of those homeowners.” “We not only have homeowners that use our products, but we also have businesses and other institutions that buy our products for backing up their operations and other critical elements of their business. For us today, in particular, if you just think about where we're at in the cycle, it's about getting as much product as we can into the market. The portable generators, and things like that, that people can use directly in an emergency until the power is reconnected, and that's a part of our business cycle that we'll probably see a run up here over the next month or so as people try to get their hands on those types of products.” “As power comes back on, we've got our retail partners who will want to replenish their stock, and then we'll start to see the larger demand surge around the stationary products, the permanently installed products for homeowners and businesses, as they start to plan, not only for the remainder of this season, which goes through the end of November but as they get into the winter season.” Jagdfeld explains that the company expects demand to continue to increase as extreme weather conditions worsen. “Obviously, you can't ignore the science. The air temperatures are getting warmer. The water temperatures are getting warmer. This is creating greater extremities of weather.” “There's a supply-demand problem here as well that's been manifesting over the last decade or so as we work to electrify everything in our lives. And that's inclusive of transportation. Now you add on top of that artificial intelligence and the data center build-out. And on the supply side, we're decarbonizing the grid. So you have some of these macro forces that are at play here that I think are just going to continue to lead to lower power quality for us as a populace here in the US amid the spikes in demand that we've been talking about.”
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