Shares of renewable energy stock Orbital Energy Group (OEG 22.37%) jumped as much as 21.5% on Wednesday after announcing a new solar project. At 11:15 a.m. EDT today, shares were up 15.4% and holding steady for the day.
Orbital Energy Group's subsidiary Orbital Solar Services was selected to be the engineering, procurement, and construction (EPC) provider for a 137 megawatt project in Arkansas. The end customer wasn't named, only that it is a North American Fortune 100 energy company.
The total project is expected to have a value of over $64 million and is due to be delivered in early 2022. This is a significant project when put into context of the $9.5 million in revenue generated in the first quarter of 2021 and the $62.1 million in backlog at the end of that quarter.
This is certainly a big contract win for Orbital Energy Group given the company's current revenue and backlog. What we don't yet have a good feel for is how profitable the company can be from projects like this. Last quarter, it lost $18 million, and it'll need to grow revenue sharply to get out of that hole.
This is a step in the right direction, but until Orbital becomes profitable, this is a highly competitive portion of the solar market that I'll stay out of.