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SolarEdge shares sink after company offers weak Q4 guidance

The SolarEdge logo is seen on a smartphone and a PC screen.

Pavlo Gonchar | SOPA Images | Sipa USA via AP Images

Shares of SolarEdge tumbled over 20% in extending trading Wednesday after the solar product manufacturer reported soft guidance for its fourth quarter amid demand struggles in the renewable energy sector.

Here’s how the company did:

  • Loss per share: 55 cents vs. 89 cents per share expected by LSEG, formerly known as Refinitiv
  • Revenue: $725 million vs. $768 million expected by LSEG

For the current quarter, the solar producer said it expects revenue of between $300 million and $350 million, missing analysts’ estimate of $688 million, according to LSEG. For the overall solar sector, SolarEdge said it expects revenue in the $275 million to $320 million range.

SolarEdge CEO Zvi Lando said in a Wednesday statement that the third-quarter disappointment is a reflection of “a slow market environment, which has resulted in high inventory of our products in the distribution channels — in particular in Europe.”

SolarEdge warned Wall Street in October that its third-quarter earnings would come in below expectations, which sent its stock plummeting 30 percent. At the time, Lando said installation rates for solar panels had declined though those rates typically increase during the third quarter.

SolarEdge is based in Israel, but Lando said in October the Israel-Hamas war has not had an impact on manufacturing.

The solar sector has faced headwinds over the past year as rising interest rates weigh on the demand for solar energy. Last December, California voted to cut the compensation rate for a solar incentive program for homeowners. That lower incentive went into effect in April, causing a spike in demand for solar installation as homeowners tried to squeeze in the work before the deadline. A further cut to California’s solar incentive programs for multifamily apartment buildings, schools and farms could soon be coming and has the potential to further deepen the demand decline.

Other solar stocks dipped slightly after the bell Wednesday. Enphase Energy was down 7%, while Sunrun saw a 4% decrease.

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