Energy Recovery (NASDAQ: ERII) saw its stock price continue to decline, plunging 8.63% in pre-market trading on Thursday. This drop follows a significant 11.18% fall during Wednesday's regular trading session, as investors reacted negatively to the company's third-quarter earnings report.
The industrial fluid flow technology specialist reported mixed results for Q3 2025, with revenue falling short of expectations. Energy Recovery posted revenue of $32 million, marking a 17% decrease year-over-year and missing analyst estimates of $32.93 million. While the company managed to beat earnings per share (EPS) expectations with an adjusted EPS of $0.12, surpassing the $0.10 estimate, other financial metrics raised concerns among investors.
Particularly troubling was the 54% year-over-year decrease in net income to $3.9 million, along with a slight decline in gross margin to 64.2% from 65.1% in the previous year. The company attributed these disappointing figures to factors such as the timing of revenue from contracted projects, product mix issues, and the impact of tariffs. Despite management's assurance that the results aligned with internal expectations, the market's reaction suggests ongoing skepticism about Energy Recovery's near-term prospects and ability to navigate current challenges in its operating environment.
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