Why Shares of Ameresco Plunged Today

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of energy solutions provider Ameresco (NYS: AMRC) fell as much as 14% in early trading today, after the company reported earnings.

So what: Second-quarter earnings were actually better than expected, with revenue falling slightly to $164.1 million, above estimates of $160.1 million, and earnings per share of $0.11 beating estimates by $0.02. But management said that full-year revenue would likely be between $695 million and $730 million, well below estimates of $811.1 million and down about $100 million from previous estimates.


Now what: Management said that a longer conversion time from awarded contracts to signed contracts is impacting revenue, which will hit the books later than expected. This doesn't change the long-term thesis for the company; it just moves some of the backlog out into 2013, which investors never like. Management still expects net income to be $32 million to $35 million, so shares trade at under 16 times earnings, a decent value considering the potential growth of the business.

Interested in more info on Ameresco? Add it to your watchlist byclicking here.

The article Why Shares of Ameresco Plunged Today originally appeared on Fool.com.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.Motley Fool newsletter serviceshave recommended buying shares of Ameresco. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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