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Energy Recovery Q3 revenue misses estimates as Iran war weighs

By Reuters News


Overview

  • US energy-saving tech firm's Q3 revenue fell 65% yr/yr, missing analyst expectations

  • Gross margin dropped to 37.5% from 64.2% due to lower volume and product mix

  • Company attributed lower Q3 revenue primarily to the war in Iran, while megaproject sales fell 95%


Outlook

  • Company did not provide specific financial guidance in its press release


Result Drivers

  • MEGAPROJECT SALES DROP - Revenue from megaprojects fell sharply, contributing to overall revenue decline

  • LOWER VOLUME AND PRODUCT MIX - Co said gross margin drop was mainly due to lower sales volume, product mix and higher indirect manufacturing costs

  • LOWER OPERATING EXPENSES - Co said operating expenses fell due to reduced employee compensation and consulting costs


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Miss

$11.20 mln

$16.20 mln (4 Analysts)

Q3 Loss Per Share

$0.12

Q3 Net Loss

$6.30 mln

Q3 Adjusted EBITDA Loss

$7.80 mln

Q3 Gross Margin

37.50%

Q3 Operating Margin

-87.50%


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is no "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the industrial machinery & equipment peer group is "buy."

  • Wall Street's median 12-month price target for Energy Recovery, Inc. is $8.00, about 11.6% above its November 3 closing price of $7.17

  • The stock recently traded at 30 times the next 12-month earnings vs. a P/E of 29 three months ago


Reuters Recommended Reads

  • Nov 3 - Oil services firms face major cost pressure from Iran crisis, execs say

  • Nov 2 - Diamondback Energy Q3 revenue beats on higher oil output


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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