SolarEdge tumbles on weak first-quarter guidance

SolarEdge‘s
stock
tumbled
Tuesday
after
the
company

gave
weak
guidance
for
the
first
quarter,
as
the
residential
solar
market
continues
to
face
headwinds
from
high
interest
rates
and
depressed
demand.

SolarEdge
expects
revenues
of
$175
million
to
$215
million
for
the
first
three
months
of
2024,
well
below
Wall
Street’s
expectations
of
$406
million.
The
company
shares
fell
as
much
as
23%
in
extended
trading.

Here’s
what
SolarEdge
reported
for
the
fourth
quarter
compared
with
what
Wall
Street
was
expecting,
based
on
a
survey
of
analysts
by
LSEG,
formerly
known
as
Refinitiv:

• Loss
  per
  share:
  92
  cents
  adjusted,
  vs.
  $1.17
  expected.
• Revenues:
  $316
  million,
  vs.
  $354
  million
  expected.

On
a
generally
accepted
accounting
principles
basis,
SolarEdge
reported
a
net
loss
of
$162.4
million
for
the
fourth
quarter,
or
$2.85
per
share,
compared
to
a
net
profit
of
$20.8
million
in
the
year-ago
period.
Excluding
certain
items,
the
company
reported
a
loss
of
92
cents
per
share
for
the
final
three
months
of
2023,
beating
the
$1.17
loss
per
share
expected
by
Wall
Street.

SolarEdge’s
posted
revenues
of
$316
million
for
the
quarter,
down
65%
from
the
$890.7
million
in
sales
the
company
reported
in
same
period
in
2022.

SolarEdge
CEO
Zvi
Lando
said
the
company
struggled
with
a
weaker
market
in
the
second
half
of
2023
due
to
high
interest
rates
and
lower
prices,
which
saddled
the
company
with
inventory.
The
company
primarily
manufacturers
inverters
that
convert
solar
power
into
useable
electricity.

“We
continue
to
face
challenges
from
general
market
dynamics
as
well
as
the
inventory
levels
of
our
products
in
the
channels
due
to
the
abrupt
slowdown
of
demand
in
the
second
half
of
2023,”
Lando
told
analysts
during
the
company’s
earnings
call.

The
struggling
European
residential
solar
market
should
bottom
in
first
quarter
and
improve
afterward,
Lando
said.
In
the
U.S.,
the
residential
market
is
not
expected
to
improve
until
interest
rates
come
down,
according
to
the
CEO.

The
inventory
backlog
SolarEdge
faces
is
not
expected
to
clear
until
the
end
of
2024,
according
to
the
CEO.
The
company
is
slashing
16%
of
its
workforce,
closing
some
manufacturing
sites,
and
exiting
certain
businesses
to
reduce
costs
in
the
face
of
weakening
revenue,
Lando
said
on
the
earnings
call.