With markets bouncing back today after yesterday's declines, shares of Orbital Energy Group (OEG 8.70%) are soaring. Celebrating the news that the company has inked a deal with Charter Communications (CHTR -0.36%), investors sent the stock flying as much as 14% higher as of 3:12 p.m. EDT.
The deal that's driving the stock's rise today involves one of Orbital Energy Group's subsidiaries, Gibson Technical Services (GTS), the recipient of an award from Charter Communications. While GTS provides services related to various networks including wireless and in-building, it's the company's prowess in fiber networks that attracted attention from Charter Communications, which is enlisting GTS to provide about 8,600 miles of "full-service construction" across Louisiana, Alabama, and North Carolina.
Speaking to the merits of the deal, Jim O'Neil, Orbital Energy Group's CEO, commented that he and the rest of the company "believe this is a transformative project for GTS and supports OEG's [Orbital Energy Group's] ongoing strategy of providing industry leading engineering and design solutions to the telecom industry valued by our customers."
Financial terms of the project were not included in the press release announcing the award.
While the scope of the project -- 8,600 miles of fiber network -- seems considerable, it's difficult to gauge how much this deal will move the needle for Orbital Energy Group. Though the company has been growing revenue over the past three years, it's failed to generate net income.
Perhaps the market is speculating that this deal is a harbinger of other deals with major communication-services companies. Or maybe investors suspect that this award will help the company on its plight to produce profits. Investors, therefore, should look for details related to this deal when Orbital Energy Group reports Q2 2021 earnings later this summer.