Miscues by PowerSecure International caused a $4.3 million first-quarter loss and forced the Wake Forest energy-services company to lower its earnings forecast for 2014.
PowerSecure’s self-admitted tactical mistakes ended a prolonged string of impressive quarters that not only saw the company through the recession but doubled its workforce to meet customer demand.
The 700-employee company reported Wednesday that first-quarter sales increased 17.4 percent to $52.8 million, but mounting expenses in the utility infrastructure division burned through the financial gains.
“We mis-timed actions to shift resources to more profitable customers, as revenues from those new customers were not adequate to sustain our margins,” CEO Sidney Hinton said in the company’s release. “To be clear, we have near-term work to do to improve our utility infrastructure margins and increase the conversion of our distributed generation pipeline into backlog.”
Hinton stressed that the company’s long-term prospects are excellent.
PowerSecure’s utility infrastructure division provides contract services in building power lines and substations for electric utility companies. PowerSecure deployed equipment and manpower to the most promising customers but said it didn’t move quickly enough and incurred productivity losses and less-than-expected revenue.
PowerSecure, with offices in Raleigh, Morrisville and Wake Forest, had 750 employees last year.
First-quarter earning were minus 19 cents a share this year compared to 4 cents a share a year ago. Net income fell from $733,000 to a loss of $4.3 million.
PowerSecure shares closed Wednesday at $18.60, down $1.90. The stock is up 8 percent this year.