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Enphase Energy
projected that the current slowdown in solar-product sales would last through the first quarter of 2024, sending the stock down 22% in premarket trading Friday.
Third-quarter earnings from the maker of solar-power equipment, released after the market closed on Thursday, squeaked past expectations. Per-share earnings were $1.02, while analysts had expected $1.01.
But management’s forecast for fourth-quarter sales was disappointing, showing that solar power is still in a significant rut. Enphase (ticker: ENPH) projected sales of $300 million to $350 million, well below analysts’ expectations for $579 million.
Solar-power stocks have been falling for weeks because fewer homeowners are installing rooftop solar systems. Many of them have been put off by high interest rates, which make large capital purchases more expensive. In California, new rules have made adding solar less cost-competitive with other kinds of electricity. And in Europe, economic pressures have also weighed on sales, said Enphase CEO Badri Kothandaraman.
“We have seen a substantial demand reduction in Europe,” he said on the company’s earnings call. Enphase’s competitor SolarEdge (SEDG) said last week that its European sales would be disappointing.
Nonetheless, Kothandaraman is optimistic that Europe will eventually bounce back. “We believe the pullback in Europe will be temporary,” he said.
The stock has fallen more than 60% in 2023.
Write to Avi Salzman at [email protected]
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