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Orion (OESX) Posts Wider Than Expected Loss in Q1, Stock Down
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Orion Energy Systems, Inc.’s (OESX - Free Report) shares fell 2.33% on Aug 9, after it reported a loss for first-quarter fiscal 2024 (ended Jun 30, 2023). Both its top and bottom lines missed the Zacks Consensus Estimate and declined year over year.
Delving Deeper
The company reported a net loss of 18 cents per share, which was 63.6% wider than the consensus estimate of a loss of 11 cents per share. In the year-ago period, it generated a loss of 9 cents.
Net sales totaled $17.6 million, which lagged the consensus mark of $22 million by 21.3%. The reported figure decreased by 1.7% from $17.9 million in the prior-year quarter. The downside was due to the variability in the timing of certain LED lighting projects.
Orion Energy Systems, Inc. Price, Consensus and EPS Surprise
Several larger projects that have commenced in the early fiscal second quarter include a Department of Defense project in Europe and an outdoor lighting project for Orion’s largest customer.
Segment Details
Lighting Division revenues were $12.6 million, down from $13.9 million a year ago. Several larger projects for national customers are now ramping up in second-quarter fiscal 2024. Decreases in LED Lighting and maintenance services were offset by contributions from the Voltrek EV charging acquisition (completed in third-quarter fiscal 2023).
Maintenance Division revenues came in at $3.8 million in the reported quarter, down from $4.1 million in the previous year. Management is focused on offsetting inflation pressures through pricing actions and increasing the percentage of self-performing work to improve margin performance.
Electric Vehicle Charging revenues were $1.2 million in the first quarter. The business is focused on integration and personnel recruitment processes designed to position it for accelerating growth on a national basis.
Operating Highlights
Gross margin contracted 180 basis points on a year-over-year basis to 18%. Products’ gross margin increased to 26.4% from 23% based on product sales mix and improved absorption of fixed costs. However, the services margin declined to (11.2%) from 10.3% in the prior-year period. This was due to legacy maintenance services contracts from the Stay-Lite Lighting acquisition, some of which are multi-year contracts and have pricing that is insufficient to absorb the cost.
Operating expenses increased by 45.5% from the prior-year period. The increase was primarily due to acquisition-related costs and increased G&A expenses.
Adjusted EBITDA in the quarter was negative of $4.4 million compared with negative of $2.9 million a year ago.
Financials
As of Jun 30, 2023, the company had cash and cash equivalents of $8.25 million compared with $16 million at the end of fiscal 2023. In first-quarter fiscal 2024, net cash used in operating activities totaled $7.3 million compared with $5 million in the previous year.
Fiscal 2024 Outlook
The company expects revenues of approximately $100 million, reflecting growth of 30% or more compared with fiscal 2023. A greater proportion of revenues is likely to be generated in the second half of fiscal 2024. Of this projection, $34 million is likely to be generated by maintenance services and EV charging solutions and $64 million from LED lighting products and solutions, including national account projects, ESCO partners and distribution channel sales.
Quanta Services Inc. (PWR - Free Report) reported mixed results for second-quarter 2023, wherein adjusted earnings missed the Zacks Consensus Estimate but revenues surpassed the same. Both metrics were up on a year-over-year basis.
The company continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
KBR, Inc. (KBR - Free Report) reported mixed second-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus estimate for the seventh straight quarter. Revenues, on the other hand, surpassed the mark in three of the trailing seven quarters and missed on other four occasions.
Although KBR’s quarterly earnings were impacted by losses related to convertible notes and a legacy legal matter, the company delivered a strong quarter of financial and environmental, social and governance or ESG performance, underpinned by its mission focus and operational discipline.
Jacobs Engineering Group Inc. (J - Free Report) reported mixed results for third-quarter fiscal 2023 (ended Jun 30, 2023), with earnings missing the Zacks Consensus Estimate but revenues surpassing the same.
Earnings declined year over year, but revenues increased on the back of solid performance across the portfolio. It also reported a near-record backlog thanks to a robust opportunity set, led by People and Places Solutions’ operating profit growth of 13% year-over-year.
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Orion (OESX) Posts Wider Than Expected Loss in Q1, Stock Down
Orion Energy Systems, Inc.’s (OESX - Free Report) shares fell 2.33% on Aug 9, after it reported a loss for first-quarter fiscal 2024 (ended Jun 30, 2023). Both its top and bottom lines missed the Zacks Consensus Estimate and declined year over year.
Delving Deeper
The company reported a net loss of 18 cents per share, which was 63.6% wider than the consensus estimate of a loss of 11 cents per share. In the year-ago period, it generated a loss of 9 cents.
Net sales totaled $17.6 million, which lagged the consensus mark of $22 million by 21.3%. The reported figure decreased by 1.7% from $17.9 million in the prior-year quarter. The downside was due to the variability in the timing of certain LED lighting projects.
Orion Energy Systems, Inc. Price, Consensus and EPS Surprise
Orion Energy Systems, Inc. price-consensus-eps-surprise-chart | Orion Energy Systems, Inc. Quote
Several larger projects that have commenced in the early fiscal second quarter include a Department of Defense project in Europe and an outdoor lighting project for Orion’s largest customer.
Segment Details
Lighting Division revenues were $12.6 million, down from $13.9 million a year ago. Several larger projects for national customers are now ramping up in second-quarter fiscal 2024. Decreases in LED Lighting and maintenance services were offset by contributions from the Voltrek EV charging acquisition (completed in third-quarter fiscal 2023).
Maintenance Division revenues came in at $3.8 million in the reported quarter, down from $4.1 million in the previous year. Management is focused on offsetting inflation pressures through pricing actions and increasing the percentage of self-performing work to improve margin performance.
Electric Vehicle Charging revenues were $1.2 million in the first quarter. The business is focused on integration and personnel recruitment processes designed to position it for accelerating growth on a national basis.
Operating Highlights
Gross margin contracted 180 basis points on a year-over-year basis to 18%. Products’ gross margin increased to 26.4% from 23% based on product sales mix and improved absorption of fixed costs. However, the services margin declined to (11.2%) from 10.3% in the prior-year period. This was due to legacy maintenance services contracts from the Stay-Lite Lighting acquisition, some of which are multi-year contracts and have pricing that is insufficient to absorb the cost.
Operating expenses increased by 45.5% from the prior-year period. The increase was primarily due to acquisition-related costs and increased G&A expenses.
Adjusted EBITDA in the quarter was negative of $4.4 million compared with negative of $2.9 million a year ago.
Financials
As of Jun 30, 2023, the company had cash and cash equivalents of $8.25 million compared with $16 million at the end of fiscal 2023. In first-quarter fiscal 2024, net cash used in operating activities totaled $7.3 million compared with $5 million in the previous year.
Fiscal 2024 Outlook
The company expects revenues of approximately $100 million, reflecting growth of 30% or more compared with fiscal 2023. A greater proportion of revenues is likely to be generated in the second half of fiscal 2024. Of this projection, $34 million is likely to be generated by maintenance services and EV charging solutions and $64 million from LED lighting products and solutions, including national account projects, ESCO partners and distribution channel sales.
Zacks Rank & Recent Releases
OESX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Quanta Services Inc. (PWR - Free Report) reported mixed results for second-quarter 2023, wherein adjusted earnings missed the Zacks Consensus Estimate but revenues surpassed the same. Both metrics were up on a year-over-year basis.
The company continues to experience high demand for its infrastructure solutions that support energy transition initiatives and increase reliability, safety and efficiency. Project activity associated with renewable generation has been going strong and is expected to continue throughout the year.
KBR, Inc. (KBR - Free Report) reported mixed second-quarter 2023 results, wherein earnings surpassed the Zacks Consensus Estimate but revenues missed the same. Earnings beat the consensus estimate for the seventh straight quarter. Revenues, on the other hand, surpassed the mark in three of the trailing seven quarters and missed on other four occasions.
Although KBR’s quarterly earnings were impacted by losses related to convertible notes and a legacy legal matter, the company delivered a strong quarter of financial and environmental, social and governance or ESG performance, underpinned by its mission focus and operational discipline.
Jacobs Engineering Group Inc. (J - Free Report) reported mixed results for third-quarter fiscal 2023 (ended Jun 30, 2023), with earnings missing the Zacks Consensus Estimate but revenues surpassing the same.
Earnings declined year over year, but revenues increased on the back of solid performance across the portfolio. It also reported a near-record backlog thanks to a robust opportunity set, led by People and Places Solutions’ operating profit growth of 13% year-over-year.