Ormat Reports 1st Quarter 2008 Results

Why this took so long to come out, I am not quite sure, but here are the 1st quarter 2008 results for Ormat Technologies ticker NYSE:(ORA).

The Company reported net income of $10.1 million, or $0.24 per share of common stock (basic and diluted), as compared to a net loss of $5.8 million, or $0.15 per share of common stock (basic and diluted), for the first quarter of 2007. This smashed analyst's estimates of $0.18 per share!

On the revenue side though they came in a little light, revenues for the first quarter were $69.4 million, versus $61.7 million for the first quarter of 2007, an increase of 12.4%. This trailed analyst's estimates of 76.5 million.

Ormat's Board of Directors approved the payment of a quarterly cash dividend of $0.05 per share pursuant to the Company's dividend policy, which targets an annual payout ratio of at least 20% of the Company's net income, subject to Board approval. The dividend will be paid on May 27, 2008 to shareholders of record as of the close of business on May 20, 2008. The Company expects to pay a dividend of $0.05 per share in the next two quarters as well.

Here is what the big bosses had to say...

Dita Bronicki, Chief Executive Officer of Ormat, stated: "The first quarter performance was in line with our expectations for 2008 and highlighted our improved operating performance, increase in our overall generating capacity and improvement in power prices in certain projects.

"Since the beginning of the first quarter, we declared commercial operation for the Galena 3 and Heber South projects and continued to make progress on our exploration work to secure geothermal resources for 2010 and beyond. Also during the quarter, we strengthened our products backlog signing three EPC agreements for a total amount of over $100 million, consisting of one geothermal and two recovered energy generation power plants, out of which approximately $50 million are still subject to a Notice to Proceed. We expect to add an additional 174 MW by the end of 2009 from projects that are currently under construction, including Olkaria and Brawley," Ms. Bronicki continued.

Commenting on the outlook for 2008, Ms. Bronicki said, "Following our first quarter earnings results, we maintain our guidance for 2008 and expect our 2008 Electricity Segment revenues to be approximately $245 million. We also expect an additional approximately $9 million of revenues from our share of electricity revenues generated by Mammoth that is accounted for under the equity method. With regard to our Products Segment, we maintain our guidance for 2008 revenues and expect them to be between $70 million and $80 million."

Ms. Bronicki concluded, "We are excited with the progress we have made this quarter, especially in recovered energy generation, which has experienced increasing interest as the need for energy efficiency begins to play a greater role in combating global warming."

We will have to see what tomorrow brings for this stock as it did not appear to be traded after the earnings were released...

To see all of our posts on Ormat Technologies including an in-depth analysis click here!

Ormat Technologies, The Pure Play On Geothermal

Ormat Technologies ticker NYSE:(ora) might be looking a little pricey at first glance with it's 75 p/e, but with earnings coming up on May 6, 2008 after the close, we will soon know if the run up the past 3 months really has legs to break through it's 52 week high of $57.93. Here is their chart since becoming publicly traded...


Now for some background information in case you are not familiar with Ormat Technologies. The company designs, develops, owns and operates geothermal and recovered energy-based power plants around the world. Additionally, the company designs, manufactures and sells geothermal and recovered energy power units and other power-generating equipment, and provides related services. Ormat Technologies has more than four decades of experience in the development of environmentally-sound power, primarily in geothermal and recovered-energy generation.

The coming election is increasingly looking like alternative energy is going to win no matter if a Democrat or Republican is elected. Sure, there is Solar, but a lot of people don't realize the potential of geothermal and heat recovery systems. Ormat is the only pure play, just look at these numbers...

They also have just recently announced two deals one in Montana...

Montana-Dakota Utilities Co. have announced that Ormat has entered into an Engineering, Procurement and Construction (EPC) agreement to build a 5.3 MW recovered energy generation facility to be located in Morton County, North Dakota. The facility, which is expected to be completed in the fourth quarter of 2009, will produce electricity without burning additional fuel. The project, subject to regulatory approvals, will increase the utilization of the energy content by approximately 25 percent and will produce enough renewable energy to supply about 5,000 residential electric customers in Montana-Dakota's service territory.

And one in Nevada... I particularly like this side of Ormat's business... retrofitting existing power plants and turning the heat that is given off as waste into energy!

Energy Holdings Company, and Ormat Technologies Inc. have announced plans to build a six-megawatt (MW) waste-heat recovery renewable energy project in the Goodsprings area south of Las Vegas. The project, subject to regulatory approvals, is scheduled to be completed in 2010 and will produce enough renewable energy to supply 1,200 residential customers in southern Nevada. The best part about these waste-heat recovery systems is that they will generate additional power with no increase in emissions. Check out this slide that shows the dependability and cost effectiveness of various forms of energy...

If that wasn't enough, I also like Ormat's Dividend policy which is for an annual payout ratio of at least 20% of the Company’s net income, subject to Board approval. That means that as Ormat grows it's dividend will grow right along with it, always nice for long term investors like me.

The conclusion that I come to is that Ormat is a great long term investment, but always around an earnings report I urge caution. Make sure never to buy all at once and slowly build your position in a stock. Develop a good cost basis and you should do find... take advantage of the dips and ride this one out, because this is a big part of the future of energy.

To learn even more about Ormat Technologies visit their website or check out Stock Picky's Tapping The Earth With Ormat!

Tapping The Earth With Ormat

Ormat Technologies NYSE: ORA is in a perfect situation as alternative energies begin to take flight. Just like the red hot solar stocks, Ormat is a play on the growing demand for alternative energy. What makes them unique is that they use geothermal power and other eco-friendly sources to generate revenue. In case you aren't familiar with the geothermal process, it is basically capturing the heat given off from the earth and turning it into electricity. The great part about this process is that it emits little or no emissions.

Not only this, but they operate in countries all over the world, so you certainly don't have to worry about any kind of "slowdown" here in The States...



Geothermal is not the only part of Ormat though, what I really think could be huge is the Recovered Energy Generation potential. What Ormat has done, is made it possible to take the heat that is waisted on a typical power plant, and harnessing it back into energy. That's right what a simple concept that should be adapted by power plants all around the world that are just literally blowing off steam...

Ormat Technologies is a small company that just became public in 2005, so it still has plenty of upside potential. They even have rather unique dividend policy, in which they are aiming to pay at least 20% of their annual profits through quarterly dividends. Which is just another potential huge reason to own this company, as it continues to earn more money in the future.
Now, it does have a sky high P/e ratio of 83, so it is by no means inexpensive, but there are a lot of people out there that see how explosive this company could become with climate change and pollution coming to the front lines. Ormat Technologies Inc. reported 3rd quarter 2007 earnings of $0.41 per share on 11/6/2007. This beat the $0.31 consensus of the 7 analysts covering the company.

As a fair warning, this is a small company with a high p/e ratio which can be the recipe for disaster. While I think that Ormat is a great long term investment, as always the best idea is to not buy all at once. I would buy a little bit here, and then wait until after the fed meeting to see if you can get in at a lower price. As I write this Ormat Technologies is trading at $50.11...