Do not invest more money than you can afford to lose.
Shares of the largest solar company in the US, SolarCity Corp, are taking a beating today, down more than 25% at the time of this writing, following the release of the company’s third-quarter earnings after the market close on October 29.
Earnings per share are the portion of a company’s profit allocated to each outstanding share of common stock. This represents a -4.23% change for the EPS reported for the same quarter in the prior year. The Alternative Energy company announced earnings per share of $-2.1 against a consensus Street estimate of $-1.99, missing estimate by $0.11. But for the current quarter, SolarCity sees sales rising just 4% to 6% from the year-ago quarter. The company guided EPS lower for next quarter to a range of -$2.60 to -$2.75 vs. estimates of -$2.51.
SolarCity expects 878-898 MW of installations for 2015, down from the July forecast of as much as 1,000 MW.
The company’s total operating expenses also shot up 115.8% year over year to $216.4 million, primarily due to higher sales and marketing, research and development, and general and administrative expenses.
Those assets will produce steady cash flows for decades to come, and management says its shift in growth strategy is part of a bigger plan to move past the aggressive spending, cash-burning growth of the past few years, and start generating positive cash flows within about a year. This is mainly because weather conditions may slow work, especially on commercial rooftops in the U.S. Northeast.
The money being invested in its business is now weighing on its bottom line.
SolarCity fell 21 percent to $30.03 at 10:19 a.m.in New York, the most on record and the lowest since September 2013. First, we officially launched our worldwide expansion with our first installations in Mexico. Second, SolarCity became the first solar power company to reach 1 gigawatt in annualized distributed solar installations in the US and likely in the world.
Friday’s sharp sell-off followed SolarCity’s 12th consecutive quarter of losses minus items.
Additionally, SolarCity Corporation now has a market capitalization of 3.70B.
