Scalper1 News
SolarCity ( SCTY ) stock was torched after hours Tuesday, after the No. 1 residential installer guided to deepening Q1 losses and slower installation growth in 2016, despite CEO Lyndon Rive’s earlier pledge to curb losses by 2017. SolarCity stock was down more than 30% after the close, after the company released its Q4 earnings and gave guidance, and after falling 5.7% in Tuesday’s regular session. Shares of rival installer Sunrun ( RUN ) also wrapped Tuesday’s regular session down 7% and were down another 6% after hours. Big solar companies SunPower ( SPWR ) and First Solar ( FSLR ) were down 6% and more than 2%, respectively, after hours. For Q4, SolarCity reported $115.5 million in sales, up 61% year over year, and a per-share loss ex items of $2.37, widening from a $1.33 per-share loss in the year-earlier quarter. Both measures beat Wall Street expectations for $105.6 million and $2.59, as well as SolarCity’s three-months-ago outlook for $100 million to $108 million and $2.60 to $2.75 losses. During Q4, SolarCity installed 272 megawatts, which was up 54% vs. the year-earlier quarter but missed the company’s earlier guidance for 280 MW to 300 MW. SolarCity ended the year with $399.6 million in sales, $7.91 losses per share minus items and 870 MW installed. The consensus of 18 analysts polled by Thompson Reuters saw $389.7 million and $8.03. Installations for the year came in below prior guidance for 878 MW to 898 MW, up 73% from 2014. Current-quarter guidance for $2.55 to $2.65 losses per share ex items would deepen from $2.36 in the year-earlier quarter and would miss analyst expectations for $2.36. SolarCity didn’t offer a Q1 sales view. The consensus modeled $113 million, which would be up 57%. Shortening Cash Conversion Cycle SolarCity’s Q1 180 MW installation guide would be up 18% year over year. For the year, it expects installations of 1.25 gigawatts, up 44%, as the extended Investment Tax Credit (ITC) on solar provides more growth tailwinds. The ITC extension will lead to “good growth in 2017 and beyond,” Rive told analysts during the company’s earnings conference call late Tuessday. But SolarCity shifted its focus in Q3 to becoming cash flow positive, sacrificing its typical 80% annual installation growth rate. Rive reiterated SolarCity’s 40% growth target for 2016 despite the low 18% growth forecast for Q1. Part of that process is shortening SolarCity’s cash conversion cycle, Rive told analysts. As a result, commercial installations will be back-end loaded. “While the ultimate result will be shorter time from the start of construction to operation and thus higher cash generation, the initial impact is lower installations in the first period implemented,” according to SolarCity’s letter to shareholders. Nevada Policies Nick Q1 Installations Nevada’s decision to slash net-metering payments to solar customers also impacted Q4 installations and Q1 guidance, Rive said. During Q4, Nevada contributed 23 MW in installations and typically accounts for 20 MW per quarter. By year’s end, Rive expects Nevadans to overturn the Public Utility Commission’s late-December decision. “Homeowners in Nevada want solar, they want the freedom to choose where their energy comes from, and I think this is going to be overturned by the public, by ballot referendum by the end of the year,” he said. Solar has thrived on other policy fronts. As the Nevada battle waged, California regulators opted to continue paying solar customers for energy fed back into the grid. And in December, more than 190 countries pledged to curb carbon emissions during a climate change summit in Paris. “The majority of this (climate change agreement) is going to be on renewable energy, which is going to be solar,” Rive told analysts. Tesla Motors ( TSLA ) CEO Elon Musk is SolarCity’s chairman. Tesla is due to report earnings late Wednesday. Tesla stock rallied to close up 0.2% after falling intraday to a two-year low. Scalper1 News
Scalper1 News