Echelon (ELON) Beats, But Slammed AH On Poor Guidance

Echelon (ELON) came close to posting its first profitable quarter in about five years and beat Wall St estimates by a good margin after the bell today, but the stock continues to get battered after hours after the company guided much lower for next quarter.  The company reported a non GAAP EPS of zero while analysts expected a loss of .17/share.  Revenues came in ahead of estimates as well at $38.8 million (vs estimates of $34 million)

Ah, but it’s always about the guidance and for ELON it doesn’t look good next quarter as the company expects a dip in NES shipments to Duke Energy.  Dip is putting it mildly.  The company expects revenues of just $15 – $17 million next quarter and a loss in the range of .25 – .27/share which would equal the loss of the last 3 quarters.  A big step back for the company, but the future still looks bright despite some bumps in the road. 

CEO Bob Maxfield commented on the quarter, saying, “We ended an otherwise difficult year with particularly strong fourth quarter results highlighted by higher NES shipments to Duke and projects in Denmark.  While we are encouraged by the activity in our NES product line, as well as pockets of growth in our LonWorks product line, we remain cautiously optimistic that we will see modest revenue growth in 2010. For the first quarter of 2010, we expect LonWorks product sales to continue at a similar pace, while NES deployments will dip after the strong fourth quarter. Revenue from Enel, which currently has sufficient inventory to meet its short-term needs, should be minimal. Looking ahead, we believe the markets for smart grid infrastructure and energy efficiency will provide a great opportunity, positioning Echelon and its product lines for growth into the future.”

Shares of ELON are off nearly 10% in after hours trading and are down about 50% in just 3 months.  Depending on how the stock reacts to support around 7, that looks like a mighty attractive place to begin scaling into a long term position, but I’d want to see some institutional buying around that level before getting in. 

:::: >>> Click Here For Your FREE Echelon Analysis

Leave a Reply

Your email address will not be published. Required fields are marked *