The trend in trading in shares of SolarEdge Technologies (Nasdaq: SEDG) was positive yesterday, as it was for most of the green energy sector, apparently in anticipation of a victory by Joe Biden in the US presidential election. After the close, however, SolarEdge released its third quarter financials, and its share price dropped in after-hours trading by 16.1% to $225, giving the company a market cap of $11.3 billion, $2 billion less than before the close. Only two weeks ago, the stock was at a peak of nearly $310. Nevertheless, despite the decline, SolarEdge's share price is still up 136% for the year to date.
SolarEdge produces technological systems for monitoring and optimization of solar energy plants, and is active in related areas through acquisitions it has made in recent years.
For the third quarter, revenue was below the analysts' consensus estimate, but within the range of the company's guidance. Revenue totaled $337 million, lower by 17.6%, as expected, than revenue for the corresponding quarter, because of the coronavirus pandemic, but slightly higher than in the previous quarter.
Net profit was well ahead of the analysts' estimate. Non-GAAP earnings per share were $1.21, which compares with a consensus estimate of $0.82.
The fall in SolarEdge's share price was apparently a result of disappointment in the company's fourth quarter guidance. SolarEdge sees revenue of $345-365 million for the fourth quarter, which compares with a consensus analysts' estimate of $390 million. In the fourth quarter of 2019, revenue was $418 million.
On a GAAP basis, SolarEdge posted a net profit of $43.8 million attributable to shareholders in the third quarter, 4.9% higher than in the corresponding quarter. Non-GAAP net profit was $65.9 million, 26.4% higher than in the corresponding quarter.
In the first three quarter of 2020, the company's revenue grew by 9.1% to $1.1 billion; net profit grew 30.8% to $123 million; and on a non-GAAP basis net profit was $169 million, which compares with $146 million in the corresponding period of 2019.
So far this year, SolarEdge has generated positive cash flow of $195 million form regular activity, 11% more than in the corresponding period last year. At the end of the third quarter, the company had cash and investments of $1.2 billion, after raising $600 million in the issue of a convertible bond at 0% interest.
"Our third quarter results reflect significant growth in Europe, despite the current economic slowdown caused by the global pandemic," said SolarEdge CEO Zivi Lando. "Our solar business outside the US reached an all-time high and the US market is showing signs of return to pre-pandemic installation levels.
"In our non-solar business, our e-Mobility team is gearing up to deliver to our customer the first significant batch of full powertrain solutions for assembly in electric vehicles in the fourth quarter. In addition to continuing to generate significant cash from operations this quarter, we raised $618 million, net of expenses, in convertible debt providing additional support for our continued organic and non-organic growth."
Published by Globes, Israel business news - en.globes.co.il - on November 3, 2020
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