Following the publication of SolarEdge Technologies Inc. (Nasdaq: SEDG) financial results yesterday after the end of trading on Wall Street, the company's share surged 19.04% to an all-time high $76.40 in premarket trading today , pushing its market cap up from $3.05 billion to $3.65 billion.
SolarEdge outperformed the analysts' forecasts for the second quarter of 2019 in both revenue and net profit, as well as its own previous guidance for revenue and gross profit. The company also gave optimistic guidance for the third quarter of this year.
SolarEdge develops systems for optimizing and monitoring solar energy. The company recent expanded into other fields besides the solar market. Its second quarter revenue totaled $325 million, 43% more than in the second quarter of 2018.
Net profit according to GAAP accounting standards was $32.9 million, down 4.8%, compared with the corresponding quarter last year. Excluding various accounting items, including those pertaining to acquisitions and capital remuneration for company employees, SolarEdge's (non-GAAP) net profit attributable to shareholders rose from $32.9 million in the second quarter of last year to $49.3 million in the second quarter of this year. Net profit per share was $0.94, $0.11 more than the analysts' forecasts.
SolarEdge's revenue in the first half of the year totaled $597 million, 36.6% more than in the corresponding period last year. GAAP net profit fell 27.6% as a result of an increase in operating expenses, while non-GAAP net profit dipped 1% to $82.2 million.
Acquiring companies contributed to business expansion
During the first half of 2019, SolarEdge generated $107 million in cash flow from regular activity, the same as in the corresponding period in 2018. The company had $373 million in cash and short-term investments as of the end of the first half of the year, after acquiring three companies in the past 15 months: the activity of Israeli company Gamatronic Electronic Industries, South Korean company Kokam, and Italian company SMRE. These acquisitions expanded SolarEdge's business beyond the solar energy sector.
"We are satisfied to sum up a strong quarter with record results," SolarEdge founder, chairman, and CEO Guy Sella says. "We continue to generate strong cash flow, while reinforcing our position as global leaders in the converters market. Despite the effect of higher rates for certain Chinese products, our non-GAAP gross profit margin in the solar sphere was a strong 37%, slightly higher than in the corresponding quarter last year. Integration of the non-solar business we acquired is progressing as planned, and we expect growth in all of our production lines in the coming quarters. We're seeing high worldwide consumer demand for all of our products, and we're building the necessary production capacity, both in China and elsewhere, in order to meet the demand."
SolarEdge's guidance for the third quarter is substantially higher than the market's forecasts: $395-410 million in revenue, including $375-390 million from the solar market. The analysts predicted $324 million in revenue, while revenue in the third quarter of 2018 totaled $237 million. According to SolarEdge, its third quarter gross profit ratio will be 32-34%.
Published by Globes, Israel business news - en.globes.co.il - on August 7, 2019
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