Genie Energy (NYSE:GNE) Posts Earnings Results, Beats Expectations By $0.18 EPS

Key Points

• Genie Energy beat earnings expectations: Second-quarter EPS was $0.43 versus the $0.25 consensus, while revenue reached $100.4 million, below the $104.6 million estimate. Net income climbed to $11.4 million from $2.3 million a year earlier, and adjusted EBITDA rose to $7.5 million.
• Margins improved despite lower revenue: Normalized wholesale energy markets helped restore retail gross margins, driving gross profit up 42% and adjusted EBITDA up 97% even as revenue declined 5%. However, the retail customer base fell to 345,000 RCEs and 363,000 meters.
• Growth initiatives and shareholder returns continue: The GREW segment achieved positive EBITDA, while Diversegy, Genie Solar and Roded’s recycled-plastic operations expanded. Genie also declared a $0.075 quarterly dividend, equivalent to a 2.1% annual yield.

Genie Energy (NYSE:GNE - Get Free Report) announced its quarterly earnings results on Thursday. The oil and gas producer reported $0.43 EPS for the quarter, beating analysts' consensus estimates of $0.25 by $0.18, FiscalAI reports. The firm had revenue of $100.40 million for the quarter, compared to analyst estimates of $104.57 million. Genie Energy had a return on equity of 13.00% and a net margin of 4.95%.

Here are the key takeaways from Genie Energy's conference call:

• Strong earnings improvement: Second-quarter net income rose to $11.4 million, or $0.42 per diluted share, from $2.3 million, or $0.09, a year earlier. Adjusted EBITDA increased $4.5 million to $7.5 million.
• Normalized wholesale energy markets restored Genie Retail Energy’s gross margin to its historical range, driving a 42% increase in gross profit and a 97% increase in Adjusted EBITDA despite a 5% revenue decline.
• GRE’s customer base contracted to 345,000 RCEs and 363,000 meters, partly due to the expiration of low-margin aggregation deals. The company increased spending on higher-cost acquisition channels, which management believes will produce higher-lifetime-value customers and support future results.
• Genie’s GREW segment reached positive EBITDA, supported by strong performance at Diversegy and Genie Solar. Diversegy is expanding its book of business at a double-digit annualized rate, while a second New York community solar project began contributing in the third quarter.
• Roded expanded Israeli pallet production, received government backing for a larger plant, earned certification to monetize plastic credits, and advanced plans for a southeastern U.S. manufacturing site. Management also expects to diversify into additional recycled-plastic products.

Genie Energy Trading Down 1.4%

Genie Energy stock traded down $0.21 during mid-day trading on Friday, hitting $14.53. 62,395 shares of the stock were exchanged, compared to its average volume of 74,474. The company has a quick ratio of 2.44, a current ratio of 2.54 and a debt-to-equity ratio of 0.03. Genie Energy has a 12 month low of $12.69 and a 12 month high of $16.60. The firm's fifty day simple moving average is $14.19 and its two-hundred day simple moving average is $14.12. The stock has a market capitalization of $383.59 million, a price-to-earnings ratio of 29.65 and a beta of 0.20.

Genie Energy Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Monday, August 24th. Shareholders of record on Friday, August 14th will be given a dividend of $0.075 per share. This represents a $0.30 dividend on an annualized basis and a yield of 2.1%. The ex-dividend date of this dividend is Friday, August 14th. Genie Energy's dividend payout ratio is currently 61.22%.

Institutional Investors Weigh In On Genie Energy

Large investors have recently modified their holdings of the company. Cubist Systematic Strategies LLC acquired a new position in Genie Energy in the first quarter valued at $85,000. Jacobs Levy Equity Management Inc. acquired a new stake in Genie Energy during the first quarter worth approximately $320,000. Dynamic Technology Lab Private Ltd bought a new stake in Genie Energy in the first quarter worth approximately $239,000. Goldman Sachs Group Inc. grew its stake in shares of Genie Energy by 15.5% in the 1st quarter. Goldman Sachs Group Inc. now owns 146,364 shares of the oil and gas producer's stock worth $2,203,000 after acquiring an additional 19,671 shares in the last quarter. Finally, Jane Street Group LLC raised its holdings in shares of Genie Energy by 128.9% in the first quarter. Jane Street Group LLC now owns 45,372 shares of the oil and gas producer's stock valued at $683,000 after purchasing an additional 25,548 shares during the last quarter. 49.15% of the stock is currently owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

A number of research analysts recently issued reports on GNE shares. Weiss Ratings upgraded shares of Genie Energy from a "hold (c-)" rating to a "hold (c)" rating in a report on Thursday, June 18th. Freedom Capital raised shares of Genie Energy from a "hold" rating to a "strong-buy" rating in a report on Friday, May 15th. Finally, Wall Street Zen cut shares of Genie Energy from a "buy" rating to a "hold" rating in a research report on Saturday, May 9th. One investment analyst has rated the stock with a Strong Buy rating and one has assigned a Hold rating to the company. Based on data from MarketBeat.com, the company currently has an average rating of "Buy".

Genie Energy Company Profile

Genie Energy Ltd. NYSE: GNE is a diversified energy holding company that operates through two primary segments: upstream oil and natural gas exploration and retail energy supply. Its exploration arm, Genie Energy E&P, pursues development of oil shale resources and conventional hydrocarbon deposits, holding licenses for projects in regions such as Israel's Shefela basin and Jordan's oil shale formations. The division also explores select opportunities in North America, leveraging technical partnerships to advance resource evaluation and pilot production programs.

Genie Retail Energy provides electricity and natural gas to residential and small commercial customers under regulated and deregulated frameworks.

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