Enphase's stock slumps as outlook miss reflects solar's ongoing struggles

By Emily Bary

Alternative-energy company calls out 'a further softening in U.S. demand' that impacted first-quarter results

Enphase Energy Inc. came up short with its latest outlook on Tuesday, and its shares slumped in the extended session.

The company, which makes products for the solar and alternative-energy markets, expects $290 million to $330 million in revenue for its second quarter, whereas analysts tracked by FactSet were looking for $347 million. Enphase (ENPH) logged $711 million in revenue in last year's second quarter.

Enphase also posted a sharp decline in revenue for the first quarter. The company hauled in $263 million on the top line for the period, compared with $726 million in the year-earlier period. Analysts were modeling $276 million.

U.S. revenue dropped about 34% in the first quarter on a sequential basis, the company said, while Europe revenue was up 70%, also on a sequential basis.

"The decline in revenue for the first quarter of 2024 compared to the fourth quarter of 2023 was the result of seasonality and a further softening in U.S. demand, while we continued to reduce shipments to manage channel inventory," Enphase said in its release.

Enphase's stock fell about 6% in Tuesday's extended session, after gaining 2.6% in regular trading.

The company recorded a first-quarter net loss of $16.1 million, or 12 cents a share, whereas it had reported net income of $146.9 million, or $1.02 a share, in the same period a year prior.

Enphase reported adjusted earnings per share of 35 cents, down from $1.37 a year before and below the 41-cent consensus view.

The solar industry has faced challenges this year, and related stocks have taken a hit upon demand concerns. Enphase shares are off 14% so far in 2024 and down 49% over a 12-month basis. Elsewhere, shares of Sunrun Inc. (RUN) are off 48% so far this year, while shares of SunPower Corp. (SPWR) are off 59%.

Enphase late last year announced layoffs impacting 10% of its staff. At the time, the company called out a "challenging" economy and said the actions would help "right-size" its business.

See more: Enphase Energy to lay off 10% of its workforce, citing 'challenging' economy

-Emily Bary

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04-23-24 2046ET

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