I expect MEK to also issue further guidance for 2007. In the Q3 conference call the company offered preliminary guidance of $15.5 million in income, $137 million in revenue, and $0.89 a share in earnings. If Metretek can deliver on these numbers, year over year earnings would see 29% growth. Not too shabby for a company trading at 13 times forward earnings.
However, it is significant to note that the company derives a major percentage of its revenue from a single contract, with supermarket chain Publix. This, in and of itself, is a bit of a red flag. Though MEK did recently announced the finalization of at least five new contracts with utility companies worth around $11 million in revenue.
Management has steadily maintained its guidance for fiscal 2006 over the past few months. In the past, MEK has been able to blow by its own numbers, as management's numbers pretty much serve as the street's numbers. This leads me to believe that the company has been rather conservative in its estimates, allowing it to over deliver and beat quite handily. It will be interesting to see if Metretek can outperform its own guidance once again.
I'll be tuning in, that much is certain.
MEK 1-yr chart
Disclosure: I do not own shares in any company mentioned.