What Awaits Clean Energy Stocks SUNW & RTK in Q2 Earnings?

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The Q2 earnings cycle is coming to an end. As of Aug 5, 87.7% of the market cap of the S&P 500 index have released quarterly numbers. Reported results reveal a 4.1% decline in second-quarter earnings due to a 0.9% dip in revenues.

This week, over 525 companies, including 26 S&P 500 members, have lined up to release quarterly numbers. Overall earnings are anticipated to witness a 3.5% decline due to 0.4% lower revenues, with 6 of the 16 Zacks sectors recording growth in the negative territory. The picture should become clearer by the end of the week after the majority releases results. For more details, you may go through our Earnings Trends report.

For companies operating in the clean energy space, environmental considerations have been propelling demand for alternative sources of energy to a large extent. In fact, both solar and wind energy got a major boost from the environmental tax credit extensions of Dec 2015.

Further, the U.S. Energy Information Administration ("EIA") anticipates total renewables used in the electric power sector to increase 11.2% in 2016. The EIA also projects utility-scale solar photovoltaic ("PV") capacity to increase by nearly 13 gigawatts ("GW") in the 2015-2017 period. Wind capacity, on the other hand, is forecasted to grow 10% in 2016 and account for 6% of the total electricity generation in 2017.

These favorable demand growth trends notwithstanding, abundant availability of fossil fuels and fluctuating oil prices have emerged as key competitive challenges for this industry. Nevertheless, its long-term fundamentals remain favorable.

Let's take a look at a couple of clean energy stocks that are scheduled to report second-quarter earnings on Aug 10.

Sunworks, Inc.SUNW offers solar power solutions. The company focuses on the design, installation and management of solar power systems for commercial, agricultural and residential customers.

Sunworks is a Zacks Rank #3 (Hold) stock with an Earnings ESP of 0.00%. Thus, our proven model does not conclusively show that Sunworks is likely to beat earnings this quarter.

During its first-quarter earnings call, Sunworks said that it is well positioned to surpass its 2016 net income guidance of $100 million. An existing leverage in its business would lead to higher profitability throughout the year. The company continues to make specific investments in its organization and infrastructure to boost efficiency. These investments will allow the company to generate higher cost savings and increase market share across all of its regions.

For the second quarter, the Zacks Consensus Estimate for earnings stands at 5 cents, reflecting year-over-year growth of 600%.

SUNWORKS INC Price and EPS Surprise

SUNWORKS INC Price and EPS Surprise | SUNWORKS INC Quote

Rentech, Inc.RTK owns a proprietary and patented gas-to-liquids process that converts carbon-bearing gases, liquids and solids into valuable liquid hydrocarbon products.

Last quarter, the company posted a negative earnings surprise of 80.00%. It carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.

During the first-quarter conference call, the company said that it expects revenues to improve sequentially in the next quarter, although it will be lower than usual due to normal weather conditions.

The Zacks Consensus Estimate for the company's revenues is pegged at $48.2 million for the second quarter. This reflects an almost 67.9% decline on a year-over-year basis. Meanwhile, our estimate for the bottom line stands at a loss of 14 cents, reflecting a 106.7% decrease.

RENTECH INC Price and EPS Surprise

RENTECH INC Price and EPS Surprise | RENTECH INC Quote

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RENTECH INC (RTK): Free Stock Analysis Report

SUNWORKS INC (SUNW): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Business , Investing , Earnings , Stocks
Referenced Symbols: SUNW

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