The 10-second takeaway
For the quarter ended June 30 (Q2), Energy Recovery beat expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly. GAAP earnings per share dropped to a loss.
Gross margins grew, operating margins dropped, net margins shrank.
Energy Recovery chalked up revenue of $8.6 million. The five analysts polled by S&P Capital IQ expected sales of $8.0 million on the same basis. GAAP reported sales were 30% lower than the prior-year quarter's $12.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
EPS came in at -$0.03. The six earnings estimates compiled by S&P Capital IQ predicted -$0.06 per share. GAAP EPS were -$0.03 for Q2 against $0.01 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures are normalized by S&P Capital IQ and may vary to maintain comparability with normalized estimates.
For the quarter, gross margin was 61.6%, 740 basis points better than the prior-year quarter. Operating margin was -14.9%, much worse than the prior-year quarter. Net margin was -17.0%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $10.5 million. On the bottom line, the average EPS estimate is -$0.03.
Next year's average estimate for revenue is $44.2 million. The average EPS estimate is -$0.14.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Energy Recovery is hold, with an average price target of $3.82.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.