SolarCity Shares Slide on Delayed Earnings - Analyst Blog


Solar PV installer SolarCity Corp. 's ( SCTY ) shares slipped 3.5% in after-hours trading yesterday as the company delayed its full earnings results until next week. The company attributed the delay to accounting related to its recent acquisitions as well as a change in overhead allocation stemming from a rise in the volume of megawatt (MW) deployed. The company now expects to release complete 2013 financial results on Mar 3.

In December last year, SolarCity completed the acquisition of rooftop racking systems maker Zep Solar, Inc. for an aggregate consideration of about $158 million. In Sep 2013, the company completed the acquisition of Paramount Solar, a subsidiary of Paramount Equity LLC., for $120 million.

Though SolarCity had to pay for the delay in releasing fourth quarter earnings, 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. SolarCity also 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.

The company's top line surged 87% year over year to $47.3 million during the quarter, ahead of the Zacks Consensus Estimate of $44.0 million by 7.5%. Its lease revenue during the quarter stood at $22.4 million, up 59% year over year, but at the low end of the company's guided range of $22 million to $24 million.

Moreover, the company turned cash flow positive in the fourth quarter of 2013 and exited 2013 with a strong year-end cash balance. SolarCity also remains on track for 2014 with a record number of new residential energy contracts signed in Jan 2014. The company also noted that costs per watt had declined 30% in 2013.

Although the company did not reveal the bottom-line numbers in its latest preliminary financial update, the Zacks Consensus Estimate is pegged at a loss of 56 cents per share for the quarter and at a loss of $1.81 per share for 2013.

SolarCity is one of several companies under real life 'Iron Man' Elon Musk's umbrella.  Founded in 2006, Musk is currently the chairman of the company he conceived to combat global warming and minimize air pollution.

SolarCity currently retains a Zacks Rank #2 (Buy). Other companies in the space worth considering include Canadian Solar Inc. ( CSIQ ), JinkoSolar Holding Co., Ltd. ( JKS ) and Trina Solar Ltd. ( TSL ). While Canadian Solar and Jinko Solar sport a Zacks Rank #1 (Strong Buy), Trina Solar carries a Zacks Rank #2 (Buy).

CANADIAN SOLAR (CSIQ): Free Stock Analysis Report

JINKOSOLAR HLDG (JKS): Free Stock Analysis Report

SOLARCITY CORP (SCTY): Free Stock Analysis Report

TRINA SOLAR LTD (TSL): Free Stock Analysis Report

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

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: CSIQ , JKS , SCTY , TSL

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