Narrower-than-Expected Loss at SolarCity - Analyst Blog


The solar power service provider SolarCity Corp. ( SCTY ) 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.

Operating Highlights

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.

Financial Position

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 ) 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 ) 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.

Zacks Rank

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 ) 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.

CANADIAN SOLAR (CSIQ): Free Stock Analysis Report

FIRST SOLAR INC (FSLR): Free Stock Analysis Report

SOLARCITY CORP (SCTY): Free Stock Analysis Report

TESLA MOTORS (TSLA): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: CSIQ , FSLR , SCTY , TSLA

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