It has been about a month since the last earnings report for Ormat Technologies (ORA - Free Report) . Shares have added about 1.1% 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 catalysts.
Ormat Technologies Q1 Earnings Beat, Revenues Up Y/Y
Ormat Technologies first-quarter 2019 earnings per share (EPS) came in at 51 cents, which surpassed the Zacks Consensus Estimate of 50 cents by 2%. The bottom line, however, deteriorated 62.5% from the prior-year quarter’s $1.36 per share.
The year-over-year decline in earnings can be attributed to a one-time tax income of $44.4 million that the company recorded in the first quarter of 2018.
In the quarter under review, Ormat Technologies generated revenues of $199 million, which exceeded the Zacks Consensus Estimate of $184 million by 8.1%. The top line also improved 8.2% on a year-over-year basis, driven by revenue growth across all its segments.
Electricity Segment: Revenues at this segment increased 7.9% year over year to $142.9 million from $128 million. The upside was primarily driven by the expanded operations at McGuinness Hills and Olkaria. Also, the USG acquisition provided a boost to this unit’s topline.
Product Segment: Revenues at this segment increased 7.1% year over year to $52.1 million from $48.7 million.
Other Segment: Revenues at this division amounted to $4 million compared with $2.9 million in the prior-year quarter.
In the reported quarter, Ormat Technologies’ total operating expenses totaled $20.5 million, up 8.9% year over year.
The company’s total cost of revenues was $124.9 million, up12.8% year over year.
Interest expenses were $21.2 million, up 48% year over year.
Ormat Technologies had cash and cash equivalents of $79.4 million as of Mar 31, 2019, compared with $98.8 million as of Dec 31, 2018.
Total long-term debt was $1,141.3 million as of Dec 31, 2019, compared with $1,040.9 million as of Dec 31, 2018.
Ormat Technologies continues to expect 2019 total revenues of $720-$742 million. The Zacks Consensus Estimate for the same, pegged at $730 million, lies just below the midpoint of the company’s guided range.
Segment wise, the company still expects electricity segment revenues in the range of $530-$540 million, excluding any impact from Puna during 2019. Likewise, the company’s Product segment revenues are expected to be $180-$190 million. It also anticipates annual adjusted EBITDA view of $370-$380 million for 2019, with no Puna-related EBITDA.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -8.22% due to these changes.
Currently, Ormat Technologies has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
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.