SolarCity Q4 Loss Narrows, Shares Jump - Analyst Blog

By Zacks Equity Research,

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The solar power service provider SolarCity Corp. ( SCTY ) finally came up with its fourth quarter 2013 bottom-line results. The company posted an adjusted fourth-quarter loss of 46 cents per share, narrower than a loss of $1.10 per share in the year-ago quarter. The reported loss was also narrower than the Zacks Consensus Estimate of a loss of 56 cents. The company's shares jumped more than 4% yesterday closing at $77.10.

On a GAAP basis, the company recorded a profit of 28 cents a share compared with a loss of $1.30 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

The company's top line surged 99.1% year over year to $47.3 million during the quarter, ahead of the Zacks Consensus Estimate of $45.0 million by 5.1%. Its lease revenue during the quarter stood at $22.4 million, up 78.7% year over year, but at the low end of the company's guided range of $22 million to $24 million.

In 2013, total revenue increased 29.1% to $163.8 million from $126.9 million in 2012.

During the quarter under review, SolarCity's gross profit advanced significantly on an annualized basis to $9.8 million from $4.3 million in the fourth quarter 2012.

Operating Highlights

The company successfully installed a record 103 MW of panels in the quarter, up sharply from 48 MW a year ago. The customer count also expanded 13% sequentially. Notably, residential installations grew 130% year over year to 70 MW during the quarter. This brings the 2013 total installations to 280 MW, above the company's previous forecast of 278 MW.

Financial Position

SolarCity, which made its first appearance on the Nasdaq in Dec 2012, had a cash balance of $596.3 million (including restricted one) at 2013 end compared with $167.6 million on Dec 31, 2012. Long-term debt (including current portion) stood at $246.0 million versus $104.1 million as on Dec 31, 2012.

For the year ended Dec 31, 2013, net cash provided by operating activities was $174.5 million versus $39.8 million in 2012.


SolarCity foresees 78 MW to 82 MW of panel installations for the first quarter of 2014 and reaffirmed its earlier projection of 475 MW to 525 MW for the year.

Meanwhile, the company provided a guidance on its adjusted quarterly loss for the first quarter 2014. It expects to see a loss between 70 cents and 80 cents a share. That's a much deeper loss than the Zacks Consensus Estimate of a loss of 51 cents.

Solar on the Rise

Solar cell manufacturer Canadian Solar Inc. ( CSIQ ) reported earnings of 39 cents per share in the fourth quarter of 2013 as against a loss of $2.43 per share in the year-ago quarter. The bottom line, however, came in below the Zacks Consensus Estimate of 49 cents by 20.4%.

JinkoSolar Holding Co. Ltd. ( JKS ) reported fourth quarter 2013 results with adjusted earnings per ADS of $1.28 (adjusted earnings of 32 cents per share) coming in ahead of the Zacks Consensus Estimate of 86 cents. The company reversed its year-ago adjusted loss per ADS of $5.06 (adjusted loss $1.26 per share) in the reported quarter.

Zacks Rank

SolarCity presently carries a Zacks Rank #3 (Hold).

The company narrowed the loss in the reported quarter on the heels of a surge in demand and higher residential installations. Moreover, the company turned cash flow positive in the fourth quarter of 2013 and exited the year with a strong 2013 year-end cash balance of $577.1 million. SolarCity also remains on track for 2014 with a record number of new residential energy contracts signed in January this year. The company also noted that costs per watt had declined 30% in 2013.

We are optimistic about SolarCity and like 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 29.1% so far this year and 554% since its first appearance in the stock market. The company has a market cap of $6.4 billion.

CANADIAN SOLAR (CSIQ): Free Stock Analysis Report

JINKOSOLAR HLDG (JKS): 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 Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: CSIQ , JKS , SCTY , TSLA

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