By Dhirendra Tripathi
Investing.com – Generac stock (NYSE:GNRC) slipped more than 6% Tuesday as investors feared share dilution from the generator-maker's offer to buy Canadian smart thermostat maker Ecobeen for up to $770-million.
Generac will pay $200 million in cash along with $450 million in stock to buy Ecobee. The company could issue another $120 million in stock to sew the deal based on Ecobee meeting certain conditions. The acquisition is expected to close during the fourth quarter.
Typically the issue of fresh equity depresses profits per share.
Adding to the subdued sentiment for the stock were the company’s third-quarter numbers with both earnings and sales falling short of estimates.
Net sales increased 34% to a record $943 million during the third quarter but came in below the $961.36 million analysts expected.
Adjusted profit per share rose by 27 cents to $2.35 but was below the $2.37 analysts forecasted.
The company maintained its full-year net sales growth guidance range of approximately 47%-50% on 2020 sales of $2.5 billion.
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