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8point3 Energy (CAFD) Q2 Earnings Impress; Gives '16 View

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8point3 Energy Partners LP reported earnings of 27 cents per share in the second quarter of fiscal 2016 (ending May 31, 2016), while the Zacks Consensus Estimate was a loss of 2 cents per share. The partnership swung into profit with a net income of $10 million in the reported quarter from a net loss incurred in the year-ago period.

8POINT3 ENERGY Price, Consensus and EPS Surprise

8POINT3 ENERGY Price, Consensus and EPS Surprise | 8POINT3 ENERGY Quote

Revenues

8point3 Energy, a limited partnership formed by two major solar companies, First Solar Inc. (FSLR - Free Report) and SunPower Corp. (SPWR - Free Report) , generated revenues of $13.5 million in the fiscal second quarter, up 520.3% year over year. The reported number was also ahead of the Zacks Consensus Estimate of $12 million.

Cash Distribution & Cash Available for Distribution

The partnership had earlier declared a second-quarter distribution of 23.25 cents per share. This is an increase of 3.5% over the first quarter.

The partnership has projected a fiscal third quarter distribution of approximately 24.06 cents per share, another 3.5% increase over the sequentially preceding quarter.

8point3 Energy generated cash available for distribution of $10.3 million in the fiscal second quarter.

Operational Highlights

In the fiscal second quarter, 8point3 Energy’s total operating costs and expenses surged to $9.6 million from $5.8 million in the year-ago quarter.

Higher selling, depreciation, amortization and accretion expenses led to the increase. Depreciation, amortization and accretion expenses were $5.4 million, up from $0.7 million a year ago.

Financial Update

8point3 Energy’s cash and cash equivalents as of May 31, 2016, were $20 million. It has $101 million available on its five-year revolving credit facility.

As of May 31, 2016, long-term debt and financing obligations were $362.5 million compared with $297.2 million as of Nov 30, 2015.

Other Highlights

8point3 Energy‘s entire portfolio of 525 MW is producing energy from May 2016. The partnership remains confident that this will help it to achieve a targeted distribution growth rate of 12% to 15% through 2017.  

Guidance

The partnership expects fiscal third quarter 2016 revenues to be between $23 million and $24 million, net income of $10 million to $11 million, adjusted EBITDA of $29 million and $30 million and Cash Available for Distribution of $20 million to $21 million.

For fiscal 2016, it expects to report revenue of $57.1 million to $59.1 million, net income of $1.8 million to $3.8 million, adjusted EBITDA of $68.8 million to $70.8 million, Cash Available for Distribution of $71.0 million to $73.5 million along with 12% to 15% distribution growth rate.

Zacks Rank

8point3 Energy currently carries a Zacks Rank #2 (Hold). Investors interested in the solar industry may also consider ReneSola Ltd. (SOL - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy).

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