Ormat Q2 Earnings Beat Estimates, Revenues Rise Y/Y

Ormat Technologies Inc. ORA reported second-quarter 2024 adjusted earnings per share of 40 cents, which beat the Zacks Consensus Estimate of 37 cents by 8.1%. The bottom line was on par with the year-ago quarter's reported actuals.

The adjusted earnings benefited from higher revenues and improved margins, offset by higher interest expenses.

The company reported GAAP earnings of 37 cents per share compared with 40 cents in the year-ago quarter.

The year-over-year deterioration can be attributed to after-tax write-offs related to the decommissioning of OREG 4, the Recovered Energy Generation facility and an unsuccessful exploration activity.

Revenues

ORA generated revenues of $213 million, which beat the Zacks Consensus Estimate by 0.9%. The top line also rose 9.3% year over year, driven by higher revenues from all three of its segments.

Segmental Revenues

Electricity: Revenues in this segment amounted to $166.2 million, up 7% year over year. This upside was primarily driven by revenue contributions from its newly acquired Enel assets, a step up in operating performance and power generation at Puna, and the resumption of Heber 1 operations.

Product: This segment's revenues improved a solid 13.1% to reach $37.8 million from the year-ago quarter's level. The improvement can be attributed to a higher backlog, enhanced revenue recognition and increased profitability from ORA's contracts.

Energy: Revenues in this division amounted to $8.9 million, up 48.1% from the prior-year quarter's figure. This was driven by improved prices from the company's Pomona 2 tolling agreement, combined with higher merchant prices.

Operational Update

Ormat's total operating expenses were $26.3 million, which increased 3.9% from the year-ago quarter's level.

The operating income rose 45% year over year to $35.1 million.

The total cost of revenues was $151.6 million, up 4.3% year over year.

Net interest expenses were $33.7 million, up 38.2% year over year.

Financial Condition

ORA had cash and cash equivalents of $66.3 million as of Jun 30, 2024, compared with $195.8 million as of Dec 31, 2023.

2024 Guidance

The company updated its guidance for 2024. It now expects to generate revenues in the range of $875-$910 million, narrower than the prior guidance of $860-$910 million. The Zacks Consensus Estimate for revenues is pegged at $881.9 million, lower than the mid-point of the newly guided range.

Revenues for the Electricity segment are now anticipated to be in the band of $710-$720 million compared with the prior expectation of $710-$730 million. Product segment revenues are now expected to be in the range of $130-$145 million compared with the earlier projection of $115-$135 million. ORA continues to expect revenues from the Energy Storage segment between $35 million and $45 million.

The annual adjusted EBITDA is projected to be in the band of $520-$550 million, up from the prior guidance of $515-$545 million.

Zacks Rank

Ormat currently carries a Zacks Rank #3 (Hold).

Recent Sector Releases

Enphase Energy, Inc. ENPH reported second-quarter 2024 adjusted earnings of 43 cents per share, highlighting a 70.7% decline from $1.47 reported in the prior-year quarter. The bottom line also lagged the Zacks Consensus Estimate of 49 cents by 12.2%.

Enphase Energy's second-quarter revenues of $303.5 million missed the Zacks Consensus Estimate of $314 million by 1.8%. The top line also declined 57.3% from the prior-year quarter's reported figure of $711.1 million.

Plains All American Pipeline, L.P. PAA reported second-quarter 2024 adjusted earnings of 31 cents per unit, which missed the Zacks Consensus Estimate of 33 cents by 6.1%. However, the bottom line improved 24% from 25 cents in the year-ago quarter.

Net sales of $12.93 billion beat the Zacks Consensus Estimate of $12.91 billion by 0.2%. The top line also increased 11.5% from the year-ago quarter's figure of $11.6 billion.

NextEra Energy Partners, LP NEP recorded second-quarter 2024 operating earnings of 66 cents per unit, which missed the Zacks Consensus Estimate of 70 cents by 5.7%.

The Zacks Consensus Estimate for 2024 earnings is pegged at $1.81 per share, which implies a year-over-year increase of 432.4%. The Zacks Consensus Estimate for sales is pegged at $1.25 billion.

To read this article on Zacks.com click here.