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The solar power service provider SolarCity Corp. (SCTY - Snapshot Report) narrowed its adjusted third-quarter loss of 43 cents per share from a loss of $2.60 per share in the year-ago quarter. The reported loss was also narrower than the Zacks Consensus Estimate of a loss of 46 cents. The adjusted third-quarter loss fared better than the company’s guidance of a loss of 50 cents to 60 cents.
On a GAAP basis, the company recorded a profit of 4 cents a share compared with a loss of $3.41 a year ago.
The strong numbers were backed by robust solar panel installations, indicating vigorous demand and supported by the company’s able execution strategy.
Top Line & Gross Profit
This leading residential solar installer in the U.S. recorded revenues of $48.6 million in the reported quarter, up from $32.0 million in the third quarter 2012. The reported figure also surpassed the Zacks Consensus Estimate of $42.0 million.
SolarCity’s gross profit advanced 11.3% to $17.5 million on an annualized basis.
SolarCity deployed 78 megawatts (MW) of solar panels during the third quarter, up 110.8% from 37 MW a year ago. This was attributable to brisk residential installations that grew 151% year over year to 60 MW. The company also booked new customers of 12,386, representing a major jump of 92.4% from the year-ago number of 6,437.
At quarter end, SolarCity had $1,737 million of contracted payments remaining, which improved 23% sequentially. The company’s retained value forecast increased by $180 million to $846 million during the third quarter.
SolarCity, which made its first appearance on the Nasdaq last December, had a cash balance of $136.3 million (including restricted one) at third quarter end compared with $160.1 million on Dec 31, 2012. Long-term debt (including current portion) stood at $141.3 million versus $104.1 million as on Dec 31, 2012.
For the third quarter ended Sep 30, 2013, net cash provided by operating activities was $100.0 million versus $34.1 million in the third quarter of 2012.
The company reaffirmed its plan to deploy 101 MW of capacity in the fourth quarter of 2013. It expects adjusted fourth-quarter loss to fall in the band of 55 cents to 65 cents per share. It also anticipates operating lease revenues between $22 million and $24 million and solar energy systems sale revenues of $18 million to $22 million, on a GAAP basis.
For 2014, SolarCity maintained its guidance for MW deployed in the range of 475 MW to 525 MW.
Solar on the Rise
Recently, Canadian Solar Inc. (CSIQ - Analyst Report) has upwardly revised its third-quarter 2013 outlook in its preliminary results. The company plans to report its third-quarter earnings on Nov 13.
First Solar Inc. (FSLR - Analyst Report) posted stellar third-quarter 2013 results with adjusted earnings of $2.28 per share beating the Zacks Consensus Estimate of 92 cents by approximately 148%. Earnings were up 79.5% year over year.
SolarCity presently retains a Zacks Rank #3 (Hold).
The loss projected for the final quarter of the year disappointed analyst expectations, thereby pulling down the share price by almost 5% to hit $69.65 a share. Despite the negative reaction from the market, we remain optimistic about SolarCity on account of its business model that allows residential customers to pay back for their solar installations on a monthly basis over a period of 20 years. This not only helps customers to evade bulky upfront payments, but also lends top-line visibility for the company.
Backed by Tesla Motors Inc. (TSLA - Analyst Report) founder Elon Musk, the SolarCity stock has rallied almost 405% since its first appearance in the stock market. The company has a market cap of $4.67 billion. Elon Musk owns about 73% of SolarCity's 78 million shares outstanding, while a relatively small proportion is entitled for the public.