- On Tuesday, SolarEdge reported third-quarter sales that fell short of Wall Street projections.
- During extended trading, shares fell as much as 8%.
- The firm, which manufactures solar inverters, cited “extraordinary worldwide logistics and supply chain issues.”
- SolarEdge has a “record backlog” of orders for the fourth quarter of 2021 and into the first quarter of the following year, according to the company.
Dropping of Share Prices
SolarEdge’s stock dropped as much as 8% in extended trading on Tuesday, November 2nd. This came after the company’s third-quarter earnings announcement. SolarEdge reported record sales for the quarter, but the figure fell short of analysts’ forecasts, sending the stock down.
The company manufactures specialist inverters, sometimes known as the brains of a solar system, which are connected to each solar module and boost the system’s energy output.
Performance of the company v/s expectation of the analysts:
- Earnings: USD 45 per share, attuned
- Revenue: USD 526 million v/s $528 million projected
The company was expected to earn $1.36 per share, according to Wall Street analysts. It’s unclear whether the reported figure is equivalent to the estimates.
In the second quarter, adjusted EPS was $1.28 per share on revenue of $480 million, and in the third quarter, adjusted EPS was $1.21 per share on revenue of $338 million. Revenue from the company’s solar division was increased by 11% quarter over quarter to $476.8 million and by 53% year over year.
Supply chain constraints continue to plague the company, which said it ended the most recent quarter with a “record backlog” for the fourth quarter of 2021 and into the first quarter of the following year. The remarks follow management’s announcement on the second-quarter conference call that supply chain tensions had begun to lessen.
Not as expected, but satisfied
“Despite unprecedented global logistics and supply chain constraints, we are thrilled with our record revenues in the third quarter,” CEO Zvi Lando said in a statement. SolarEdge’s third-quarter results included the phrase as well. During the COVID-19 outbreak, a manufacturing factory in Vietnam was shut down for 12 weeks, he noted.
SolarEdge incurred higher costs as a result of the supply chain crisis but chose not to pass those costs on to customers by raising pricing.
This is in contrast to competitor Enphase Energy, which said last week that it raised pricing in the previous quarter and promises to do so again this quarter. In the residential inverter industry in the United States, the two companies virtually have a duopoly.