Ormat Technologies (ORA) Up 0.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Ormat Technologies (ORA). Shares have added about 0.2% 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 Q2 Earnings Top, Revenues Rise Y/Y
Ormat Technologies’ second-quarter 2023 earnings per share came in at 40 cents, which outpaced the Zacks Consensus Estimate of 38 cents by 5.3%. The bottom line also improved a solid 100% on a year-over-year basis.
Revenues
In the quarter under review, ORA generated revenues of $194.8 million, which missed the Zacks Consensus Estimate of $198 million by 1.9%. The top line, however, rose 15.2% year over year, driven by higher revenues from the Electricity and Product segments.
Segmental Revenues
Electricity: Revenues in this segment amounted to $155.3 million, which rose 2.7% year over year. This upside was primarily driven by focused execution of the company’s strategic plan, supported by the addition of North Valley and the upgrade of Dixie Valley.
Product: This segment’s revenues improved a massive 222% to $33.5 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 $6 million, down 19.7% from the prior-year quarter’s figure. This was due to lower energy rates at the PJM compared with the strong commodity price-driven rates in the second quarter of 2022.
Operational Update
Ormat Technologies’ total operating expenses came in at $25.3 million compared with $19 million in the year-ago period.
Operating income deteriorated 37.3% year over year to $24.2 million.
Total cost of revenues came in at $145.3 million, up 30.3% year over year.
Net interest expenses were $24.4 million, up 19.5% year over year.
Financial Condition
ORA had cash and cash equivalents of $275.1 million as of Jun 30, 2023, compared with $95.9 million as of Dec 31, 2022.
2023 Guidance
The company still projects revenues in the range of $823-$858 million for 2023. The Zacks Consensus Estimate for the same is pegged at $842.5 million, a tad higher than the midpoint of the guided range.
Revenues for the Electricity segment are still anticipated in the band of $670-$685 million. The consensus estimate for the Product segment’s revenues is pinned in the $120-$135 million range. Revenues for the Energy Storage segment are still expected between $33 million and $38 million.
ORA also continues to anticipate annual adjusted EBITDA in the band of $480-$510 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 18.27% due to these changes.
VGM Scores
At this time, Ormat Technologies has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. 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.
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Ormat Technologies, Inc. (ORA) : Free Stock Analysis Report
