Ormat Technologies (ORA) Cuts 2012/2013 Rev Forecast Due To Falling Nat Gas Prices

Ormat Technologies (ORA) is falling more than 7% in heavy volume this morning after it cut its revenue forecasts for 2012 and 2013 due to changes in power purchase agreements for its Heber, Ormesa and Mammoth geothermal plants in California.  The company initially thought that the new pricing would have a smaller impact on revenues resulting in a reduction of $9.5 and $6.5 million over the next two years. However, as a result of falling natural gas prices and the delay of California’s cap and trade program, the company now sees revenues decreasing by about $25 million in both 2012 and 2013.  Despite the drops, the company still expects 2012 revenue to equal or come in higher than it did last year, but official guidance will be discussed during the earnings report on Feb 22nd.

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Commenting on the revised guidance, Dita Bronicki, CEO of Ormat Technologies, said: “Revenues from new projects and our strong product segment pipeline should offset the impact of the current natural gas prices. While there are expectations that natural gas prices may increase due to various market conditions, such as LNG exports, we will continue to seek alternatives to the variable pricing terms for our SRAC PPAs.”

Technically, ORA remains in a long downtrend and still technically weak.  Today’s move is a definitive failure at resistance around the 50 day moving average and the stock should be avoided at this time.

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