Financials on the upswing: NGP takes first revenues and Calpine in the black, while Ormat raises eyebrows

The financial picture being painted by earnings reports looks generally good as those reports for the quarter ended December 31, 2009 filter in. Nevada Geothermal Power Inc. brought in its first revenues from its Faulkner I power plant and Calpine Corp. brought in $149 million of net income for the fiscal year. However, despite record revenues in 2009 from Ormat Technologies, a restatement of its 2008 financial statements has at least one law firm nipping at its heals.

During the quarter, which is NGP’s 2nd quarter of fiscal 2010, the company began commercial operation, selling its first power and gradually increasing production, which averaged 28 MW during December. The power sold earned revenue of $2,644,045 but the company suffered a net loss of $6,801,687 for the quarter. NGP has a 20-year purchase power agreement with NV Energy for the electricity generated the Falkner plant.

The plant’s construction finished early and it began generating electricity in late October. However, the listed Commercial Operation Date was November 20, 2009, and the NGP could only charge a rate at roughly 40% of the commercial rate prior to that.

Calpine Corp. closed out its fiscal year December 31, and its earnings before interest, taxes, depreciation and amortization (EBITDA) $1,782 million, up $83 million, or 5%, over 2008 and raised its cash flow 23% to $609 million. Net income was $149 million, up from $10 million in 2008.

The company’s president and CEO, Jack Fusco expects EBITDA in 2010 to rise to between $1.5 and $1.6 billion. The company operates 77 natural gas-fired and geothermal power plants with a total capacity of nearly 25,000 MW. It has 15 geothermal plants at The Geysers in California generating 725 MW, only about 3% of its total generating portfolio.

Ormat Technologies in the meantime reported record revenues for 2009 of $415 million. However, and earnings restatement for fiscal 2008 decreased net income some $6.2 million during the year end and the fourth quarter ended December 31, 2008, 12.6% below the reported $49.5 million for the year and 53.6% below the income of $11.6 million in the fourth quarter of 2008.

The reason for the restatement had to do with accounting for exploration and development costs using a method analogous to the full cost method used in the oil and gas industry. Impairment tests had performed on an area-of-interest basis rather than at a single site and under the methodology, costs associated with projects that were determined to not be economically feasible remained capitalized as long as the area-of-interest was not subject to impairment. However, following a periodic review performed by Securities and Exchange Commission staff, it was determined that this accounting treatment was inappropriate, hence the changes.

This prompted a Pennsylvania law firm – Law Offices of Howard G. Smith – to announce that it is investigating potential claims against Ormat. Smith issued a press release effectively looking for Ormat stockholders who may have suffered a loss or just want more information. We’ll be watching to see where, if anywhere, this leads.