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Ormat Technologies (ORA) Up 12.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Ormat Technologies (ORA - Free Report) . Shares have added about 12.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ormat Technologies due for a pullback? 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 drivers.
Ormat Technologies' third-quarter 2023 adjusted earnings per share came in at 47 cents, which outpaced the Zacks Consensus Estimate of 36 cents by 30.6%. The bottom line also improved a solid 42.4% on a year-over-year basis.
Revenues
In the quarter under review, ORA generated revenues of $208.1 million, which missed the Zacks Consensus Estimate of $211 million by 1.4%. However, the top line rose 18.3% year over year, driven by higher revenues from all operating segments.
Segmental Revenues
Electricity: Revenues in this segment amounted to $157.2 million, which rose 2.9% year over year. This upside was primarily driven by the focused execution of the company’s strategic plan, supported by the addition of North Valley and the resumption of operations at Heber 1.
Product: This segment’s revenues improved a massive 180.2% to $39.8 million from the year-ago quarter’s level. The improvement can be attributed to the higher backlog and the favorable timing of recognized revenues.
Energy: Revenues in this division amounted to $11 million, up 24.5% from the prior-year quarter’s figure. This was due to the commencement of commercial operations across multiple assets and higher energy rates in ERCOT.
Operational Update
Ormat Technologies’ total operating expenses came in at $22.4 million compared with $22.2 million in the year-ago period.
The operating income deteriorated 3.4% year over year to $37.6 million.
The total cost of revenues came in at $148.1 million, up 28.9% year over year.
Net interest expenses were $25.1 million, up 12.1% year over year.
Financial Condition
ORA had cash and cash equivalents of $78.1 million as of Sep 30, 2023 compared with $95.9 million as of Dec 31, 2022.
2023 Guidance
The company updated its guidance for 2023. It now expects revenues in the range of $825-$838 million, down from the prior expectation in the band of $823-$858 million. The Zacks Consensus Estimate is pegged at $830.9 million, lower than the midpoint of the guided range.
Revenues for the Electricity segment are now anticipated in the band of $670-$675 million, down from the prior guidance range of $670-$685 million. The Product segment’s revenues are projected in the band of $125-$130 million. Revenues for the Energy Storage segment are now expected between $30 million and $33 million.
ORA now anticipates annual adjusted EBITDA in the band of $480-$495 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, Ormat Technologies has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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 C. 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. Notably, Ormat Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ormat Technologies is part of the Zacks Alternative Energy - Other industry. Over the past month, Clearway Energy (CWEN - Free Report) , a stock from the same industry, has gained 15.2%. The company reported its results for the quarter ended September 2023 more than a month ago.
Clearway Energy reported revenues of $371 million in the last reported quarter, representing a year-over-year change of +9.1%. EPS of $0.03 for the same period compares with $0.28 a year ago.
Clearway Energy is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of +20%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Clearway Energy has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Ormat Technologies (ORA) Up 12.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Ormat Technologies (ORA - Free Report) . Shares have added about 12.9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Ormat Technologies due for a pullback? 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 drivers.
Ormat Technologies Q3 Earnings Top, Revenues Rise Y/Y
Ormat Technologies' third-quarter 2023 adjusted earnings per share came in at 47 cents, which outpaced the Zacks Consensus Estimate of 36 cents by 30.6%. The bottom line also improved a solid 42.4% on a year-over-year basis.
Revenues
In the quarter under review, ORA generated revenues of $208.1 million, which missed the Zacks Consensus Estimate of $211 million by 1.4%. However, the top line rose 18.3% year over year, driven by higher revenues from all operating segments.
Segmental Revenues
Electricity: Revenues in this segment amounted to $157.2 million, which rose 2.9% year over year. This upside was primarily driven by the focused execution of the company’s strategic plan, supported by the addition of North Valley and the resumption of operations at Heber 1.
Product: This segment’s revenues improved a massive 180.2% to $39.8 million from the year-ago quarter’s level. The improvement can be attributed to the higher backlog and the favorable timing of recognized revenues.
Energy: Revenues in this division amounted to $11 million, up 24.5% from the prior-year quarter’s figure. This was due to the commencement of commercial operations across multiple assets and higher energy rates in ERCOT.
Operational Update
Ormat Technologies’ total operating expenses came in at $22.4 million compared with $22.2 million in the year-ago period.
The operating income deteriorated 3.4% year over year to $37.6 million.
The total cost of revenues came in at $148.1 million, up 28.9% year over year.
Net interest expenses were $25.1 million, up 12.1% year over year.
Financial Condition
ORA had cash and cash equivalents of $78.1 million as of Sep 30, 2023 compared with $95.9 million as of Dec 31, 2022.
2023 Guidance
The company updated its guidance for 2023. It now expects revenues in the range of $825-$838 million, down from the prior expectation in the band of $823-$858 million. The Zacks Consensus Estimate is pegged at $830.9 million, lower than the midpoint of the guided range.
Revenues for the Electricity segment are now anticipated in the band of $670-$675 million, down from the prior guidance range of $670-$685 million. The Product segment’s revenues are projected in the band of $125-$130 million. Revenues for the Energy Storage segment are now expected between $30 million and $33 million.
ORA now anticipates annual adjusted EBITDA in the band of $480-$495 million.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
Currently, Ormat Technologies has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, 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 C. 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. Notably, Ormat Technologies has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Ormat Technologies is part of the Zacks Alternative Energy - Other industry. Over the past month, Clearway Energy (CWEN - Free Report) , a stock from the same industry, has gained 15.2%. The company reported its results for the quarter ended September 2023 more than a month ago.
Clearway Energy reported revenues of $371 million in the last reported quarter, representing a year-over-year change of +9.1%. EPS of $0.03 for the same period compares with $0.28 a year ago.
Clearway Energy is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of +20%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Clearway Energy has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.