SolarEdge's stock plummets 11% as company becomes latest poster child for solar industry's problems

By Claudia Assis

Current-quarter sales guidance is well below Wall Street estimates

Shares of SolarEdge Technologies Inc. dropped more than 11% in the extended session Tuesday after the maker of inverters and other solar-power equipment reported quarterly sales that fell more than 60% and guided for even lower sales, the latest reminder of the ongoing downdraft for the solar industry.

Lower demand amid high interest rates and regulatory changes in California, as well as rising inventories, have pummeled solar-power and related industries, and SolarEdge just last month embarked on a cost-cutting plan and announced layoffs to try to right itself.

The company swung to a surprise loss last quarter, saying it was navigating a "slow market environment." Fourth-quarter earnings were mixed, but guidance also disappointed Wall Street.

SolarEdge (SEDG) lost $162.4 million, or $2.85 a share, in the fourth quarter, versus earnings of $21 million, or 36 cents a share, in the year-ago quarter.

Adjusted for one-time items, SolarEdge lost 92 cents a share. Analysts polled by FactSet were looking for an adjusted loss of $1.34 a share.

Revenue dropped 65% to $316 million, from $891 million a year ago. That includes revenue of $282 million for its solar segment, down 66% from the prior quarter's revenue.

The analysts surveyed by FactSet expected SolarEdge to report revenue of $323 million in the quarter.

Gross margin from the solar segment dropped to 4%, compared with 24% in the prior quarter and 32.4% in the same quarter of last year.

SolarEdge guided for first-quarter revenues to be within the range of $175 million to $215 million, and gross margins between negative 3% and a positive 1%.

FactSet consensus calls for first-quarter revenue of $374 million.

Guidance "came in more meaningfully below our/Street estimates as the company continues to work to drive down channel inventories," Truist Securities analyst Jordan Levy said in his note.

Investors are likely "to take issue with SEDG's continued margin pressures," Levy added.

SolarEdge shares have lost 72% in the past 12 months, contrasting with gains of around 22% for the S&P 500 index SPX and compared with a loss of around 40% for the Invesco Solar ETF TAN in the same period.

-Claudia Assis

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

02-20-24 2045ET

Copyright (c) 2024 Dow Jones & Company, Inc.