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Energy Recovery +30% after crushing Q4 earnings, revenue estimates

  • Energy Recovery (ERII +30.1%) shares break past $6 for the first time since October after the maker of energy recovery devices and circulation pumps easily beats Q4 earnings and revenue estimates.
  • ERII 54% Y/Y revenue increase to $23.2M reflected the strongest revenue quarter in the company's history.
  • Gross margin was 63% in Q4 vs. 43% a year ago, ERII's third consecutive quarter at or above 60%.
  • Says it is working to complete its first seawater desalination plant in Carlsbad, Calif., which management hopes will inspire "the construction of many plants needed to compensate for diminishing water supplies" in the American West due to drought.
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Comments (7)
  • Esekla
    , contributor
    Comments (3022) | Send Message
     
    My article, now available only to Pro subscribers, focused on this earnings report as the breakout point, and showed a fundamental case for the stock to exceed its previous $12 high. Other authors have concurred, and Michael Fitzsimmons, in particular has done a number of excellent articles which overview the company's technology. You can also follow me here and on Twitter for real-time updates.

     

    http://bit.ly/1idC9EF

     

    Restructuring has completely transformed Energy Recovery's profit profile and they are poised to ink contracts in new markets with 10 times the market potential of the desalination which they have dominated. Over 12% of ERII float being held short will help to bring a breakout year into focus sooner rather than later.
    6 Mar, 11:16 AM Reply Like
  • Michael Fitzsimmons
    , contributor
    Comments (8717) | Send Message
     
    Esekla - what an excellent conference call huh?

     

    Rooney mentioned an O&G contract was signed, but none of the analysts asked the obvious question - why no press release? Reading between the lines, this could mean the O&G company preferred to keep it confidential. From that perspective, I infer that ERII's skids are such a competitive advantage they want to keep the contract under wraps for as long as possible....and that, to me, is another bullish signal for ERII. Your thoughts?
    6 Mar, 11:36 AM Reply Like
  • Esekla
    , contributor
    Comments (3022) | Send Message
     
    Yeah, the signed contract is big news. I've been having thoughts about the recent company silence. I'll comment in your article, linked above, or write one of my own in the next day.
    6 Mar, 11:43 AM Reply Like
  • GrowthGeek
    , contributor
    Comments (1097) | Send Message
     
    ERII is now definitely one to watch as it is finally emerging as a growth play with serious forward momentum.
    6 Mar, 12:03 PM Reply Like
  • TwoFour24
    , contributor
    Comments (18) | Send Message
     
    Andd the fact that they are debt free is a huge positive
    6 Mar, 12:20 PM Reply Like
  • empeasea
    , contributor
    Comments (2) | Send Message
     
    The last quarter was way off due to a continuing order being delivered a few days after the quarter ended verses a few days prior to the end of the quarter the previous year. I've scanned the earnings info, yet found no mention of the obvious reason for the "blow-out" quarter. What would there earnings and gross margins be if that were plugged into the current quarter?
    6 Mar, 12:36 PM Reply Like
  • tgar13
    , contributor
    Comments (194) | Send Message
     
    The bullishness in the earnings transcript in regards to oil and gas and ammonia industry is remarkable! This seems like a $12 stock by summer as more contracts are announced. With pressure on margins for these refineries any payback helps and if your competitor gets the advantage then you will need it to compete. Once the initial wave of oil and gas companies get the technology then other late adopters will be forced to adopt to decrease the competitive pricing advantage! Then in 5 years ERII could develop an improved version and do it all again a virtuous cycle!
    6 Mar, 03:46 PM Reply Like
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