Yahoo Finance Why Is Ormat Technologies (ORA) Up 9.1% Since Last Earnings Report?
A month has gone by since the last earnings report for Ormat Technologies (ORA). Shares have added about 9.1% 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 Q1 Earnings Miss Estimates, Revenues Rise Y/Y
Ormat Technologies reported first-quarter 2024 adjusted earnings per share of 65 cents, which missed the Zacks Consensus Estimate of 68 cents by 4.4%. The bottom line, however, improved a solid 27.5% on a year-over-year basis.
The company reported GAAP earnings of 64 cents per share compared with 51 cents in the year-ago quarter.
Revenues
ORA generated revenues of $224.2 million, which missed the Zacks Consensus Estimate by 0.1%. However, the top line rose 21.1% year over year, driven by higher revenues from Electricity, Product and Energy Storage segments.
Segmental Revenues
Electricity: Revenues in this segment amounted to $191.3 million, up 12.3% year over year. This upside was primarily driven by higher generation from the Puna, Heber 1 and North Valley plants, as well as new revenue contributions from the Enel acquisition.
Product: This segment’s revenues improved a solid 147.3% to reach $24.8 million from the year-ago quarter’s level. The improvement can be attributed to higher backlog and favorable timing of recognized revenues.
Energy: Revenues in this division amounted to $8.1 million, up 65.6% from the prior-year quarter’s figure. This was driven by the impact of the CODs for storage facilities that the company achieved in the first quarter and higher merchant prices in the PJM region.
Operational Update
Ormat’s total operating expenses were $26.2 million compared with $22.9 million in the year-ago period.
The operating income dropped 1.1% year over year to $52.6 million.
The total cost of revenues was $145.4 million, up 33.2% year over year.
Net interest expenses were $31 million, up 31% year over year.
Financial Condition
ORA had cash and cash equivalents of $201.5 million as of Mar 31, 2024, compared with $195.8 million as of Dec 31, 2023.
2024 Guidance
The company reiterated its guidance for 2024. It still expects to generate revenues in the range of $860-$910 million. The Zacks Consensus Estimate for revenues is pegged at $881.9 million, lower than the mid-point of the guided range.
Revenues for the Electricity segment continue to be anticipated in the band of $710-$730 million, while Product segment revenues are still expected in the range of $115-$135 million. Revenues for the Energy Storage segment continue to be expected between $35 million and $45 million.
ORA anticipates annual adjusted EBITDA in the band of $515-$545 million.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
The consensus estimate has shifted 24.75% due to these changes.
VGM Scores
At this time, 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. 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, TC Energy (TRP), a stock from the same industry, has gained 5.1%. The company reported its results for the quarter ended March 2024 more than a month ago.
TC Energy reported revenues of $3.15 billion in the last reported quarter, representing a year-over-year change of +8.3%. EPS of $0.92 for the same period compares with $0.89 a year ago.
For the current quarter, TC Energy is expected to post earnings of $0.63 per share, indicating a change of -11.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.4% over the last 30 days.
TC Energy has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.
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