Tom Konrad CFA
Ameresco, Inc. (NYSE:AMRC) reported first quarter (Q1) earnings this morning, missing analysts’ earnings expectations by two-thirds. While Q1 earnings were only 3 cents compared to the 10 cents expected by analysts, the company slightly beat revenue expectations by $600,000 for overall Q1 revenues of $146.6 million.
While the headline was disappointing, President and CEO George Sakellaris confidently reaffirmed revenue guidence for the rest of the year, saying that he expected 2012 revenues to be heavily back loaded. Sakellaris predicts the second half to account for 60-62% of 2012 revenues, compared to 38%- 40% for the first half of the 2012.
Longer term, he expects Ameresco to continue its strong growth, with operating margin strengthening towards 20% over the longer term.
Strong revenue growth is coming from contract with the federal government. While Ameresco received only $2 million worth of awards in the whole of 2011, they have already been awarded $20 worth of contracts in 2012. Sakellaris commented that Ameresco has found it hard keeping up with federal demand so far this year.
These new contracts (up 50% over Q1 2011) helped grow Ameresco’s backlog by 10% compared to last year. While such new contracts will not begin producing revenue until 2013 at the earliest, they should give investors confidence that Ameresco’s long term growth potential is still in place. Ameresco’s revenues should continue to grow 20% year over year, despite the poor earnings performance this quarter.
This mornings’ earnings miss may cause a sell-off over the next day or two. Investors should take the opportunity to add to their positions in this sustainable company which has low exposure to expiring renewable energy subsidies.
Disclosure: Long AMRC.
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