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Factors Likely to Shape Orion Energy's (OESX) Q3 Earnings

Zacks Equity Research
·4 mins read

Orion Energy Systems, Inc. OESX is slated to report third-quarter fiscal 2020 results on Feb 6, before the opening bell.

In the last reported quarter, the company’s earnings of 22 cents per share handily beat the Zacks Consensus Estimate by 214.3% and revenues outpaced the same by 43.3%. This provider of LED lighting and turnkey energy project solutions (including controls and integrated IoT capabilities) had recorded a year-ago loss of 8 cents per share. Revenues of $48.3 million jumped significantly from $13.2 million a year ago.

Revenues and earnings increased significantly in the fiscal second quarter. Its quarterly revenues more than tripled and net income was recorded at $6.7 million. The upside was mainly due to a $110-million national account contract booked earlier in 2019, which is set to be completed by the end of fiscal 2020 (ending Mar 31).

Trend in Estimate Revision

The Zacks Consensus Estimate for the to-be-reported quarter’s earnings has increased 250% to 7 cents per share over the past seven days. This indicates a significant jump from the year-ago loss of 2 cents per share. The consensus mark for revenues is $27.8 million, suggesting a 70.8% year-over-year improvement.

Orion Energy Systems, Inc. Price and EPS Surprise

Orion Energy Systems, Inc. Price and EPS Surprise
Orion Energy Systems, Inc. Price and EPS Surprise

Orion Energy Systems, Inc. price-eps-surprise | Orion Energy Systems, Inc. Quote

Factors to Note

Orion Energy’s revenues for the fiscal second quarter are like to have benefited from increased products and services for turnkey LED lighting retrofit solutions provided to a major national account customer. The company’s national account segment has been a primary growth driver of business, not only from the existing retail, automotive, public sectors and other ongoing accounts, but also from new customer relationships. Improvement from its energy service company (ESCO) and agency-driven distribution channels are expected to have added to the positives.

Overall, continued successful execution of a large turnkey design-build-install project for LED lighting systems and controls in the national accounts business are likely to have contributed to top-line growth.

Higher revenues and ongoing efforts to optimize service, sourcing and manufacturing efficiencies are expected to have expanded its margins, thereby increasing profitability in the fiscal second quarter.

What Our Model Indicates

Our proven model predicts an earnings beat for Orion Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Orion Energy has an Earnings ESP of +50.00%.

Zacks Rank: The company currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth a Look

Here are some other companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

North American Construction Group Ltd. NOA has an Earnings ESP of +14.29% and carries a Zacks Rank #2.

Installed Building Products, Inc. IBP has an Earnings ESP of +3.09% and carries a Zacks Rank #1.

Louisiana-Pacific Corporation LPX has an Earnings ESP of +30.00% and holds a Zacks Rank #1.

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