Generac Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of generator maker Generac (NYS: GNRC) have plunged today, down by 14% at the low, after reporting fourth-quarter earnings this morning.

So what: Revenue rose by two-thirds to $267.3 million, but bottom-line net income of $267.1 million isn't as rosy as it sounds. Generac saw a $238 million income tax benefit resulting from the reversal of some accounting charges related to its brand transition. Adjusted net income was $51.8 million.

Now what: Residential product sales jumped by 67.6% and Generac closed its acquisition of Magnum Products. CEO Aaron Jagdfeld said the company is pleased with the initial progress of the acquisition since Magnum's financial results have come in better than expected. Jagdfeld is "particularly excited" about cross-selling opportunities that the combined company can now offer, and said the acquisition should be an "attractive use of shareholder capital."

Interested in more info on Generac? Add it to your watchlist byclicking here.

At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.