Shares of Montauk Renewables have experienced a significant decline following the company’s announcement of weaker-than-expected third-quarter results. The stock is currently down 32% at $6.98, contributing to a year-to-date decrease of 37%.
In a statement released after the bell on Thursday, Montauk revealed that lower rainfall and higher temperatures than anticipated had a negative impact on output during the third quarter. As a result, the company is revising its full-year outlook.
Montauk now expects its renewable natural gas revenue for the year to range between $155 million and $160 million, compared to the previous projection of $160 million to $175 million. The projected production volume has also been adjusted from a ceiling of 6.1 million MMBtu to a range of 5.7 million to 5.8 million MMBtu.
Furthermore, the company has reduced its renewable electricity revenue guidance to $17.7 million to $18.7 million, representing a decrease of approximately $300,000 at both ends of the previous range.
Despite an increase in earnings for the third quarter to $12.9 million, or nine cents a share, compared to $11.2 million, or eight cents a share, during the same period last year, Montauk fell short of analyst expectations of 10 cents a share. Additionally, revenue declined slightly to $55.7 million due to lower gas commodity prices, missing analyst forecasts of $59.4 million.
Montauk Renewables will need to navigate through these challenges in order to regain investor confidence and achieve its financial targets.