SolarCity Corporation (NASDAQ: SCTY)
On Thursday, October 29, 2015, SolarCity Corporation, a pioneer in solar energy services, headquartered in San Mateo California, reported their third quarter earnings. Immediately after the numbers were released the shares sold off hard in heavy, frantic trading in the after-hours session. When the smoke cleared at 8 PM EST, shares were down over 18% at $31.18. The shares closed the regular training session up at $38.07. The company reported earnings which lost $2.10 per share, much higher than the $1.95 loss expected by the street. Sales revenue did increase by almost 100% to $113 million. Analysts had been expecting $111 million in revenues for the third quarter. Looking forward, things aren’t looking too much brighter as the company has now stated that they expect an adjusted per share loss in the fourth quarter of between $260-$275 million versus the current estimate from analysts which have them at a loss of $2.17 million.
Competitors
SolarCity Corporation faces many fragmented competitors in this field. One is the behemoth First Solar, which also reported earnings today. However, sales and revenue fared much better for them as they raised their 2015 guidance and their revenues beat handily.
Late Thursday, First Solar earned $3.38 a share on revenue of $1.27 billion, up from 87 cents and $889.3 million reported last year. Analysts surveyed by Thomson Reuters had expected EPS of $1.55 on revenue of $1.11 billion. Barrons
SCTY Company Comments
“Specifically it is our goal to achieve positive cash flow by 2016 year-end and be in solid shape prior to the planned ITC expiration in 2017. We expect to continue to lead the industry in MW Installed with the lowest costs and strong returns, and we expect GAAP operating lease revenues to grow in excess of 70% year-over-year in 2016. In turn, we will be even more selective in the markets and projects we enter into. As such, we are introducing preliminary 2016 guidance of 1.25 GW Installed, representing a healthy year-over-year growth of approximately 41% as compared to the midpoint of our 2015 guidance. We also expect to announce meaningful reductions to our 2017 cost targets by our next earnings call.” YahooFinance
Technical Analysis
Shares have been in a clear down trending price-channel since the beginning of 2014. Also note the multiple occurrences where the stock hit the upper channel and then reversed back down to the lower Channel. After today’s earnings report, we will likely see the shares open tomorrow morning right around that lower channel shown by the red circular area highlighted with a yellow arrow.
Company Profile
SolarCity Corporation designs, manufactures, installs, maintains, monitors, leases, and sells solar energy systems to residential, commercial, government, and other customers in the United States. It offers solar energy systems; solar lease and power purchase agreement finance products; mounting hardware for photovoltaic panels; and related software, as well as develops a proprietary battery management system, which is designed to enable remote, bidirectional control of distributed energy storage that can provide benefits to customers, utilities, and grid operators. The company also sells electricity generated by solar energy systems to customers. It offers its products and services through direct outside sales force; door-to-door sales force; call centers; channel partner network; and robust customer referral program. The company was founded in 2006 and is headquartered in San Mateo, California.
