Wall Street is pummeling Wake Forest-based PowerSecure (NYSE: POWR) after a disappointing earnings call and a cut in financial projections. Shares plunged 60 percent after the company went from a 4-cent-per-share profit a year ago to a 17-cent-per-share loss in the first quarter even though revenues jumped 17 percent.

The bloodletting began at the market open with shares trading at $8.09, down more than $10 from Wednesday’s close of $18.60.

Shares finished the day down a whopping 62.4 percent, closing at $7.

Trading was extremely heavy with 10 million shares trading hands. Normal daily volume is 297,000. 

Outspoken CEO Sidney Hinton went out of his to repeatedly apologize for the energy company’s performance. He asked for patience and trusts from customers as well as investors. Five analysts firms downgraded the stock, however, and investors are bailing.

Always colorful and outspoken Hinton held nothing back  as he talked with Wall Street analysts on Wednesday – apparently to no avail.

“Hey, will you let me just – forget the prepared remarks,” Hinton declared as a conference call to discuss a disappointing first quarter earnings report neared a close.

“[W]e appreciate and I mean you guys have been investors in this for a long time.

“We appreciate it.

“We hope and pray that we have – and I know we are disappointed yet, I hope and pray we have enchanted your confidence in us, we work hard … to build this company.”

Yes, indeed, the lights must have been burning brightly and late at the Wake Forest headquarters of Power Secure (Nasdaq: POWR) in the days ahead of Wednesday evening’s earnings announcement.

Revised revenue projections for the year will fall short of $300 million, which was the goal as shown in a slide from a recent presentation.

PowerSecure went from a 4-cent-per-share profit a year ago to a 17-cent-per-share loss in the first quarter even though revenues jumped 17 percent to nearly $52.8 million. And Hinton went out of his to repeatedly apologize for the energy company’s performance. He asked for patience and trusts from customers as well as investors. But will they go along?

He did everything but fall on a sword in explaining why the company muffed.

“Before I speak to the investors who make up the majority of our listeners today, I do want to thank those customers and utilities who have dialed-in we appreciate the opportunity to serve you and believing that we work hard everybody to earn your trust and earn your respect and we appreciate the opportunity to that,” he said to begin the call, according to a transcript provided by Wall Street financial news site SeekingAlpha.

He referred to prepared remarks and a press release that began with financial highlights as most such documents do. But then Hinton had launched into a lengthy explanation of what happened. By the time the conference call began, the press release had been devoured by analysts seeking more detail on what happened.

He tried to head off a full-scale assault with remarks that basically said “We’ve learned our lesson” and “Don’t sell our shares.”

Challenges from a Big Customer

Hinton discussed at length challenges in delivering services to a big utility customer, which was not identified. However, in November PowerSecure announced a contract with a large utility firm that Hinton boasted about in an earnings call.

“This win has the potential to be the largest contract that PowerSecure has ever won,” Hinton said. “The contract is with one of the largest electric utilities in the country. And they’ve selected us as one of two new partners to provide transmission infrastructure service on their power grid.”

“Where We are at …”

Back to the conference call …

“As you will guess we have prepared remarks in almost, and I will go to those in just a second but I want to speak to investors, I will look at the list of people who dialed in, I know almost all of you personally and we have appreciate the confidence you placed in us and I believe comments are relatively unprepared, but I want to speak to you first before I go into explaining where we are at,” Hinton said.

“First we have been through tough times before, we have overcome all of them.

“Second we hate absolutely hate that we have disappointed you, we have disappointed ourselves, but please understand we are not defeated and we are not giving up. We have made hard decisions to tune the business up. It’s easier to tune it up, the car than it is to build a car from scratch.

“By God’s wish and grace we are the people that built it, we understand the business, we are focused like crazy on getting it tuned up, so it will go further and faster than it would have before. We built the company, we understand the company we know that is a present situation as not acceptable. I’m focused, our team is focused, on fixing it and moving forward, we own it.”

“We mis-timed actions …”

In the press release, Hinton described what had happened:

“PowerSecure is well positioned for the long-term, but we were very disappointed with first quarter revenues and the degree to which our utility infrastructure revenue shortfalls and operating inefficiencies negatively impacted gross margins and our bottom line.

“Our strategic priority in utility infrastructure is to increase its long-term profitability, but we mis-timed actions to shift resources to more profitable customers, as revenues from those new customers were not adequate to sustain our margins. Based on the efforts we are undertaking to improve our utility infrastructure business, as well as protracted timing in converting larger distributed generation project opportunities from our pipeline into our backlog, we have reduced our revenue and profit expectations for 2014, as reflected in the outlook we have provided.

“The strong first quarter gross margins we saw in our distributed generation and energy efficiency businesses, combined with excellent progress in the manufacturing transition of our LED products, continued execution from our ESCO services team, and the outstanding pipeline of large, high quality distributed generation opportunities we are pursuing all provide us with confidence that improvements in our UI business will further strengthen our platform for success in 2015 and beyond. 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, but we believe our future is very bright with significant opportunities across the business.”

A Grilling before Closing

Hinton and Chief Financial Officer Chris Hutter were grilled until the must have felt seared. Most earnings conference calls are boring.

Not this one.

As the call ended, Hinton decided to go off-script and apologize again, as was noted at the beginning of the story.

But that wasn’t all he said. 

“We are committed to fix this, we made a conscious decision. I realize some of you might disagree, we are slowing down and adjusting, we feel like we made the right balance decision looking out for 2014 and sitting here a year from now and we think everybody going to be applauding to the decisions that we made,” Hinton said.

“Appreciate your time confidence in us, we appreciate your patience. We hate like hell that we disappointed you, but we’re committed to being here patient and being out there communicating you. With that good night, thanks.”

So did his remarks and the corrections he promised sway investors?

The market today will send an early critique.