Comverge Reports Net EPS Loss of $(0.06)

Comverge

reported net EPS of $(0.06), below our expectation and company's guidance. Although there were more demand response events in 3Q and weather was favorable, Comverge reported lower than expected revenue, missing its guidance and Oppenheimer's estimate. The main reasons for the miss seem to be the deferred revenue related to the residential VPC contracts and lower than expected energy efficiency contract revenue. Oppenheimer is disappointed that Comverge lowered its 2010 revenue guidance to $118M-125M from $125M-137M. It seems that the company is reflecting the disappointing 3Q results in the guidance and lowering 4Q expectations. Oppenheimer's FY10 estimate reflects the changes. Also, it is lowering its FY11 estimate based on Comverge's guidance. Oppenheimers revised 2010 and 2011 EPS estimates are $(0.94) and $(0.50). Oppenheimer has a Perform rating on COMV. COMV closed Monday at $6.63.