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NEW YORK (AP) — Shares of Generac Holdings Inc. were poised to take off with the resumption of trading on Wednesday, expected to be helped by a steep jump in demand for portable generators stemming the destruction caused by superstorm Sandy.
At least 7.4 million people from Maine to the Carolinas were left without power after Sandy roared ashore Monday night. State and local officials said Tuesday that it could be more than a week before power is restored to many people.
William Blair analyst Brian Drab said in a Monday note to investors that Generac, which makes generators for residential and commercial use, usually sees a jump in sales of its flagship home generator after events like these, as consumers and businesses try to prevent future power losses.
Drab estimated that Generac sold between $100 million and $150 million in residential generators after Hurricane Irene, which left more than 4 million people without power. If the company gets the same boost from Hurricane Sandy, ($100 million in sales over the next three quarters), its total revenue would increase about 40 percent this year to just over $1 billion, he said.
Drab said that sales increase could boost Generac's 2012 earnings to between $2.80 and $2.90 per share, well ahead of his current prediction of $2.68 per share. He also noted that the company's shares rose more than 20 percent in the week following Hurricane Irene.
Over the past two months, Generac shares have risen 30 percent. In the two days before trading was suspended ahead of the storm, the shares rose about 6 percent.