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SolarCity (SCTY) Reports Narrower-than-Expected Q3 Loss

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SolarCity Corp. , the largest U.S. rooftop solar installer, posted an adjusted loss of $2.27 per share in the third quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of $2.35. However, in the year-ago period, the company had incurred a loss of $2.10.

Total Revenue & Gross Profit

SolarCity posted total revenue of $200.6 million in the quarter, beating the Zacks Consensus Estimate of $168 million by 19.4%. On a year-over-year basis too, reported revenues surged 76.6% on the back of higher contributions from periodic billings, operating lease payments and upfront incentives as well as higher solar energy systems and components sales.

SolarCity’s gross profit in the third quarter improved 183.1% to $71.6 million from $25.3 million a year ago.
 

Operating Highlights

In the reported quarter, total deployment was 189 megawatts (MW), down 7.8% year over year, bringing the total installed capacity to 2,492 MW as of Sep 30, 2016.

The company installed 187 MW of solar panels in the quarter, down 27%. It exited the quarter with cumulative installations of 2,547 MW.

During the quarter, commercial installations declined 24.5%, while residential installations fell by 27.6%.

The company’s total operating expenses increased 19.1% to $257.7 million primarily due to higher general and administrative expenses.

Cost per watt was $2.89 in the third quarter, down 5%. SolarCity’s installation cost dipped 2.4% to $2.02 per watt.

SOLARCITY CORP Price, Consensus and EPS Surprise

 

SOLARCITY CORP Price, Consensus and EPS Surprise | SOLARCITY CORP Quote

Financial Position

As of Sep 30, 2016, SolarCity had cash and cash equivalents of $259.3 million, compared with $382.5 million as of Dec 31, 2015.

Long-term debt as of Sep 30, 2016 increased to $1,283.5 million (net of current portion) from $1,006.6 million as of Dec 31, 2015.

In the third quarter, SolarCity’s used net cash of $36.8 million in operating activities, compared with $140.6 million a year ago.

Guidance

For 2016, SolarCity anticipates to install approximately 900 MW.

Notably, on Aug 1, Tesla (TSLA - Free Report) inked a deal to acquire SolarCity for $2.6 billion in an all-stock transaction. Shareholders of both the companies are set to meet and vote on the proposed merger on Nov 17. Due to this proposed acquisition, the company didn’t provide any guidance.

Peer Releases

SunPower Corp. (SPWR - Free Report) reported third-quarter 2016 adjusted earnings of 56 cents per share, missing the Zacks Consensus Estimate of 67 cents by 16.4%. Reported earnings were, however, much higher than the year-ago figure of 3 cents.

First Solar Inc. (FSLR - Free Report) reported the third quarter of 2016 earnings of $1.22 a share, beating the Zacks Consensus Estimate of 69 cents by a wide 76.8%. The reported number, however, plunged 64.2% from the prior-year figure of $3.41.

Zacks Rank

SolarCity currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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