Energy recovery device manufacturer Energy Recovery (NASDAQ:ERII) will be reporting results this Wednesday after market hours. Here’s what to look for.
Energy Recovery missed analysts’ revenue expectations last quarter, reporting revenues of $12 million, down 57.2% year on year. It was a softer quarter for the company, with a significant miss of analysts’ EBITDA estimates.
Is Energy Recovery a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Energy Recovery’s revenue to decline 49.5% year on year, a further deceleration from the 17.1% decrease it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Energy Recovery has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Energy Recovery’s peers in the industrial machinery segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Tennant delivered year-on-year revenue growth of 6.3%, missing analysts’ expectations by 2.6%, and Xylem reported a revenue decline of 3%, falling short of estimates by 3.5%. Xylem traded down 18.5% following the results.
Read our full analysis of Tennant’s results here and Xylem’s results here.
Investors in the industrial machinery segment have had steady hands going into earnings, with share prices flat over the last month. Energy Recovery is up 6.7% during the same time and is heading into earnings with an average analyst price target of $8 (compared to the current share price of $7.29).
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