Orbital Energy Group, Inc. (OEG) Tops Q3 EPS by 3c, Revenues Miss

Orbital Energy Group, Inc. (NASDAQ: OEG) reported Q3 EPS of ($0.11), $0.03 better than the analyst estimate of ($0.14). Revenue for the quarter came in at $13.6 million versus the consensus estimate of $23.5 million.

Financial and Operating Highlights:

• Reported total revenues of $13.6 million for the third quarter of 2020, compared to $6.1 million for the third quarter of 2019, an increase of 124%, primarily attributable to the addition of Reach Construction Group ("Reach") and the Company's Orbital Power Services group;
• Gross profit was $2.4 million for the third quarter of 2020, compared to $1.4 million for the third quarter of 2019 with the improvement mainly due to increased revenues; this improvement is expected to persist throughout the remainder of 2020 and into 2021;
• Gross margin was 17.3% for the third quarter of 2020, compared to 23.4% for the third quarter of 2019;
• Operating loss was $6.3 million for the third quarter of 2020, compared to $3.7 million in the prior year period, mainly due to higher SG&A expenses associated with Orbital Power Services and the addition of Reach during the second quarter;
• Held Cash and cash equivalents of $4.1 million and Restricted cash of $3.6 million as of September 30, 2020; and
• Total backlog was $52.0 million at September 30, 2020, up from $46.4 million at June 30, 2020, reflecting backlog growth at both Reach Construction and Orbital Power Services.

Commentary

"In the third quarter, we continued our evolution into a diversified infrastructure services provider," said Jim O'Neil, vice chairman and CEO of Orbital Energy. "Our recently acquired solar engineering, procurement, and construction services company, Reach Construction Group, is engaged for multiple, utility scale solar programs starting in the fourth quarter and has a robust pipeline of additional project opportunities. Further, our new Orbital Power Services division, which focuses on electric transmission and distribution services, keeps gaining traction and increasing industry recognition. This resulted in several storm-related projects, which generated additional revenues for us in the third quarter and has extended into the fourth quarter."

Mr. O'Neil added, "As utilities continue to integrate renewable generation into their transmission and distribution systems, we believe it is imperative that infrastructure providers have the technology, expertise and construction resources they need to conduct these multi-faceted projects while adhering to increasing environmental, social and governance (ESG) standards. Looking ahead, we expect customer activity will continue to increase, as conditions improve since the onset of COVID-19 and renewable energy trends drive utilities' capital investment plans. We believe Orbital Energy Group is well suited to meet these needs, with our ability to offer a diverse service offering for these growing industry demands."

For earnings history and earnings-related data on Orbital Energy Group, Inc. (OEG) click here.

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