It has been about a month since the last earnings report for Ormat Technologies (ORA Quick QuoteORA - Free Report) . Shares have lost about 1.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ormat Technologies due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ormat Technologies Q2 Earnings Beat, Revenues Drop Y/Y

Ormat Technologies’ second-quarter 2020 earnings per share (EPS) came in at 45 cents, which surpassed the Zacks Consensus Estimate of 38 cents by 18.4%. The bottom line however declined 32.8% year over year.

The year-over-year downside can be attributed to an increase in income tax provision.

Revenues

In the quarter under review, Ormat Technologies generated revenues of $174.9 million, which exceeded the Zacks Consensus Estimate of $167 million by 4.8%. However, the top line dropped 5% on a year-over-year basis due to lower revenues from each of its segments.

Segment Revenues

Electricity Segment: Revenues at this segment amounted to $128.7 million in the second quarter, which slipped 0.3% year over year.

Product Segment: Revenues at this segment declined 16% year over year to $43.7 million.

Energy Storage and Management Services: Revenues at this division amounted to $2.5 million, down 15%from the prior-year quarter.

Operational Update

In the reported quarter, Ormat Technologies’ total operating expenses were $17.3 million, compared with operating expenses of $18.3 million in the second quarter of 2019.

The company’s operating income rose 2.6% year over year to $48.1 million in the second quarter.

The company’s total cost of revenues was $109.5 million, down 7.9% year over year.

Interest expenses were $19.8 million, which declined 8.1% year over year.

Financial Condition

Ormat Technologies had cash and cash equivalents of $173.7 million as of Jun 30, 2020, compared with $71.2 million as of Dec 31, 2019.

Total long-term debt was $1,132 million as of Jun 30, 2020, compared with $1,012 million as of Dec 31, 2019.

Guidance 2020

Ormat Technologies updated its expectations for 2020. It now expects 2020 total revenues in the range of $710-$725 million, narrower than the earlier predicted band of $710-$740 million. The Zacks Consensus Estimate for the same, pegged at $719.1 million, lies little above the midpoint of the guided range.

Segment-wise, the company now expects electricity segment revenues of $550-$560 million, compared with theprior guidance of $550-$570 million. However, the company’s Product segment revenues are stillexpected to be $140-$150 million.

Ormat Technologies currently anticipates annual adjusted EBITDA of  $400-$410 million, compared with$400-$415 million projected earlier.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -7.77% due to these changes.

VGM Scores

At this time, Ormat Technologies has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Ormat Technologies has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.