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8point3 Energy (CAFD) Beats FY16 Earnings, Revenues Up

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8point3 Energy Partners LP reported earnings of $1.27 per share in fiscal 2016 (ended Nov 30, 2016), beating the Zacks Consensus Estimate of $1.10.

The partnership reported net income of $4.2 million in the fourth quarter, compared with net loss of $8.6 million in the year-ago period.

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 $61.2 million in fiscal 2016, up a massive 474.1% year over year.

In the fiscal fourth quarter, the partnership reported revenues of $14.5 million.

Cash Distribution & Cash Available for Distribution

The partnership recently declared a fiscal fourth-quarter distribution of 24.90 cents per unit. This marks an increase of 3.5% over the fiscal third-quarter level.

The partnership projects fiscal first-quarter fiscal 2017 distribution of approximately 25.65 cents per unit, reflecting another 3% sequential hike.

8point3 Energy generated $20.4 million of cash available for distribution in the fiscal fourth quarter.

Operational Highlights

In fiscal 2016, 8point3 Energy’s total operating costs and expenses increased to $39.0 million from $18.3 million in the year-ago quarter.

Higher cost of operations, depreciation, amortization and accretion expenses, along with acquisition-related costs led to the increase in expenditure. Cost of operations was $7.0 million, up from $2.6 million a year ago. Depreciation, amortization and accretion expenses were $22.8 million, up from $4.3 million a year ago.

8point3 Energy Partners LP Price, Consensus and EPS Surprise

 

8point3 Energy Partners LP Price, Consensus and EPS Surprise | 8point3 Energy Partners LP Quote

Financial Update

8point3 Energy’s cash and cash equivalents as of Nov 30, 2016 were $14.3 million, compared with $56.8 million as of Nov 30, 2015.

As of Nov 30, 2016, long-term debt and financing obligations were $384.4 million, compared with $297.2 million as of Nov 30, 2015.

Other Highlights

8point3 Energy’s portfolio consisted of 642 MW of solar generating assets as of Nov 2016 end. The partnership completed the acquisition of a 49% interest in SunPower's 102 MW Henrietta solar project during the quarter. On Dec 1, the partnership closed the acquisition of a 34% interest in First Solar’s 300 MW Stateline solar project, located in San Bernardino County. The projects, both having 20-year contract lives, are expected to generate approximately $11.0 million and $32.0 million in annual cash distributions, respectively.

Guidance

The partnership expects first-quarter fiscal 2017 revenues of $9.3 million to $9.8 million, net loss of $6.4 million to $5.6 million, adjusted EBITDA of $11.8 million to $12.6 million and cash of $19.8 million to $20.3 million available for distribution.

For fiscal 2017, it expects revenues of $63.3–$66.7 million, net income of $27.0–$32.6 million, adjusted EBITDA of $106.5–$113.1 million and cash of $91.5–$101.0 million available for distribution.

Price Movement

8point3 Energy’s stock has lost about 5.0% in the last three months, outperforming the Zacks categorized Solar industry’s 12.9% decline. This could be driven by the company’s focus on strategic acquisitions that help to boost its performance.



Zacks Rank & a Stock to Consider

8point3 Energy currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the solar industry may also consider Canadian Solar, Inc. (CSIQ - Free Report) , which carries the same Zacks Rank as 8point3 Energy. Canadian Solar posted an average positive earnings surprise of 73.66% in the trailing four quarters. It expects EPS growth of 14% in the next five years.

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