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Why Is Ormat Technologies (ORA) Down 17.5% Since Last Earnings Report?

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It has been about a month since the last earnings report for Ormat Technologies (ORA - Free Report) . Shares have lost about 17.5% 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 the most recent earnings report in order to get a better handle on the important drivers.

Ormat Technologies Q4 Earnings Beat, Revenues Down Y/Y

Ormat Technologies' fourth-quarter 2020 adjusted earnings per share (EPS) came in at 39 cents, exceeding the Zacks Consensus Estimate of 34 cents by 14.7%. Earnings also soared 62.5% from the prior-year quarter’s 24 cents per share.

For 2020, Ormat Technologies’ operating EPS came in at $1.65, down 4.1% from the prior-year quarter’s $1.72.

Revenues

In the fourth quarter, Ormat Technologies generated revenues of $179.4 million, which missed the Zacks Consensus Estimate of $183 million by 1.8%. Also, the top line declined 6.8% on a year-over-year basis, primarily led by lower revenues from its Product segment.

For 2020, Ormat Technologies’ revenues summed $705.3 million, down 5.5% from the prior-year quarter’s $746 million.

Segment Revenues

Electricity Segment: Revenues increased 1.3% year over year to $146.2 million from the prior-year quarter’s $144.4 million. The increase was mainly attributable to Steamboat Hills enhancement and repowering plant in Ormesa offset by curtailments in Olkaria.

Product Segment: Segment revenues plunged 37.5% year over year to $27.4 million from the year-earlier quarter’s $43.8 million. The decline in revenues was due to lower backlog impacted by COVID-19 pandemic.

Energy Storage and Management Services: Revenues in this division amounted to $5.8 million, surging 28.3% from the prior-year quarter. The increase was mainly driven by the addition of the Rabbit Hill project in Texas and the acquired Pomona asset in California.

Operational Update

In the December-end quarter, Ormat Technologies’ total operating expenses were $21.8 million, up 9% year over year.

Operating income during the quarter totaled $53.2 million compared with the $54.5 million registered in the year-ago period.

The company’s total cost of revenues in the fourth quarter was $104.3 million compared to $117.9 million in the year-ago period.

Interest expenses were $19.1 million during the quarter, up 8.5% on a year-over-year basis.

Financial Condition

Ormat Technologies had cash and cash equivalents of $448.2 million as of Dec 31, 2020, compared with $71.2 million as of Dec 31, 2019.

Total long-term debt was $1,377.2 million as of Dec 31, 2020, compared with $1,011.9 million as of Dec 31, 2019.

Guidance 2021

Ormat Technologies projects full-year 2021 total revenues of $640-$675 million, with electricity segment revenues estimated at $570-$580 million. Likewise, the company’s Product segment revenues are expected to be $50-$70 million. The Zacks Consensus Estimate for the same is pegged at $690.5 million, higher than the company’s guided range.

The company also anticipates annual adjusted EBITDA of $400-410 million for 2021. It expects annual adjusted EBITDA attributable to minority interest to be approximately $32 million.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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