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8point3 Energy Tops Q3 Earnings, Revenues Miss Estimates

8point3 Energy Partners LPCAFD reported third-quarter fiscal 2015 (ending Aug 31, 2015) earnings of $1.3 million or 5 cents per share. The Zacks Consensus Estimate was a loss of 7 cents.

Formation of a Public Company

8point3 Energy is a limited partnership formed by two major solar companies - First Solar Inc. FSLR and SunPower Corp. SPWR - to own and operate a portfolio of selected solar energy generation assets. The shares of 8point3 Energy Partners began trading on Jun 19, 2015.

Revenues

In the quarter under review, total revenues came in at $3.1 million compared with the year-ago figure of $2.3 million. The reported number came short of the Zacks Consensus Estimate of $5 million by 38%.

8point3 Energy expects fourth-quarter revenues to be between $4.9−$5.1 million.

Cash Distribution & Cash Available for Distribution

The partnership declared a third-quarter distribution for its Class A shares of 15.7 cents per share, the prorated minimum quarterly distribution for the post-IPO period from Jun 24, 2015 to Aug 31, 2015.

It expects distribution per share to rise 3.5% to 22 cents from the non-prorated third-quarter 2015 distribution.

The partnership generated Cash Available for Distribution of $6.7 million in the fiscal third quarter. Cash available for distribution is expected to be between $14.8 million and $15.2 million for the fourth quarter of fiscal 2015.

Operational Highlights

In the fiscal third quarter, 8point3 Energy's total operating costs and expenses declined 0.6% year over year to $3.8 million. Higher selling, general and administrative expenses (up 148.1% year over year) and depreciation, amortization and accretion expenses (up 71%) were offset by lower cost of operations expenses (down 96%).

The partnership incurred an total other expense (net) of $3.4 million in the reported quarter, up from $1.3 million a year ago.

Financial Update

8point3 Energy's cash and cash equivalents as of Aug 31, 2015, came in at $43.4 million. It has $191 million available on its five-year revolving credit facility and $25 million available through a delayed draw on its debt facility. With this, 8point3 Energy had total liquidity of $259 million as of Aug 31, 2015.

As of Aug 31, 2015, long-term debt and financing obligations were $297.1 million compared with $91.2 million as of Dec 28, 2014.

Project Highlights

8point3 Energy had 301 megawatt ("MW") in production at the end of the fiscal third quarter and expects 131 MW of additional projects to reach commercial operation by the end of the year. Notably, the partnership is on track with its 108 MW Quinto project scheduled for commercial operation on Oct 31, 2015. The project is generating test energy prior to being deployed into service. Its assets will likely generate about $70 million in annual Cash Available for Distribution with an approximately 22-year average remaining contract term once the partnership's initial portfolio reaches commercial operation.

Zacks Rank

8point3 Energy currently carries a Zacks Rank #3 (Hold). Investors interested in the solar industry may consider JA Solar Holdings Co., Ltd. JASO currently carrying a Zacks Rank #1 (Strong Buy).

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JA SOLAR HOLDGS (JASO): Free Stock Analysis Report

FIRST SOLAR INC (FSLR): Free Stock Analysis Report

SUNPOWER CORP-A (SPWR): Free Stock Analysis Report

8POINT3 ENERGY (CAFD): 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 Nasdaq, Inc.


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

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