Why Ameresco Stock Plunged Today
Shares of Ameresco (NYSE: AMRC) were down 18% as of 2:45 p.m. ET Tuesday after the cleantech integrator and renewable asset developer announced weaker-than-expected quarterly results.
For Ameresco's third quarter of 2023, revenue declined 24% year over year, to $335.1 million, translating to non-GAAP (adjusted) net income of $21.1 million, or $0.40 per share (down from $0.50 per share in the same year-ago period). Analysts, on average, were looking for earnings of $0.46 per share on revenue closer to $385 million.
The causes of Ameresco's disappointing quarter
Delving deeper into Ameresco's results, total project backlog grew 14% sequentially from last quarter, to $3.701 billion, including $708 million in new awards during the third quarter.
CEO George Sakellaris noted that while the company continues to execute well on its "long-term strategic business development activities," the quarter was negatively impacted by several issues including longer-than-expected downtime at some energy asset plants, as well as supply chain delays and administrative bottlenecks, which pushed out some project revenue.
"While disappointing, we expect to capture these revenues in future quarters," Sakellaris added.
What's next for Ameresco stock?
Worse yet, Ameresco expects project conversion delays, push-outs in asset permitting, and labor and material shortages to persist into 2024. As such, the company lowered its full-year 2023 outlook to call for revenue of $1.315 billion to $1.37 billion (down from $1.45 billion to $1.55 billion previously), with adjusted earnings per share of $1.15 to $1.25 (reduced from $1.80 to $1.90 before).
In the end, Ameresco might well be poised to deliver stronger-than-expected results in the coming quarters as it captures the aforementioned delayed project revenue. But for now, the market hates being told to hurry up and wait, and shares of this renewable energy stock are understandably falling today in response.
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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
