Genie Energy Reports Y/Y Declines in Earnings & Revenues in Q3

Core Viewpoint - Genie Energy Ltd. (GNE) is facing a mixed landscape in its third-quarter 2024 earnings, with challenges in the energy sector but advancements in its renewables segment, positioning the company for growth in retail and utility-scale markets [1] Q3 Results - Earnings per share for Q3 2024 were 38 cents, a decrease of 28.3% from 53 cents in the prior-year quarter [2] - Total quarterly revenues were $111.9 million, down 10.5% from $125 million in the year-ago quarter, impacted by reduced electricity consumption and increased customer acquisition costs [2] Segmental Performances - Genie Retail Energy (GRE) saw a 12.1% year-over-year revenue decrease to $105.8 million from $120.3 million, attributed to lower electricity consumption and higher customer acquisition costs [3] - Operating income in GRE dropped 31.6% to $15 million from $22 million in the prior-year quarter, with adjusted EBITDA falling 30.7% to $15.5 million from $22.3 million [4] Genie Renewables (GREW) - The renewables segment experienced revenue growth of 29.2% to $6.1 million from $4.7 million, driven by Diversegy's nearly doubled revenues and a shift towards utility-scale solar projects [5] - Operating loss in GREW narrowed from $2.1 million to $0.2 million, reflecting improved cost management [6] Profitability Metrics - Gross profit for the quarter was $37.9 million, down 7.7% from $41.1 million, but gross margin improved to 33.9% from 32.9% due to better margins in the renewables segment [7] - Operating income fell 34.7% to $11.7 million from $17.9 million, with adjusted EBITDA decreasing 26.7% to $13.6 million from $18.5 million [8] Cost Analysis - Cost of revenues decreased to $74 million from $84 million, aligning with reduced electricity consumption [9] - Selling, general and administrative (SG&A) costs rose to $25.2 million from $23.2 million, reflecting increased customer acquisition costs [9] Cash & Debt - Cash and cash equivalents totaled $191.7 million as of September 30, 2024, up from $178.3 million as of June 30, 2024 [11] - Total liabilities were $141.4 million, with cash provided by operating activities reaching $22.9 million, an 18.4% decline from $28 million in Q3 2023 [12] Management Guidance - The company reaffirmed its 2024 adjusted EBITDA guidance of $40-$50 million, expecting to align with the higher end of this range due to robust operational results [13] Other Developments - Genie repurchased approximately 123,000 shares of Class B Common stock for $2 million and maintained a quarterly dividend of 7.5 cents per share [14] - GRE's customer acquisition increased the meter count by 36,000, although higher acquisition costs and decreased electricity use impacted revenues and profitability [15]