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SolarEdge (SEDG) Q1 Earnings Beat, Down Y/Y on Higher Opex

Zacks Equity Research

SolarEdge Technologies, Inc. SEDG reported first-quarter 2019 adjusted earnings of 64 cents per share, which surpassed the Zacks Consensus Estimate of 62 cents by 3.2%. The bottom-line figure, however, declined 26.4% from 87 cents registered in the prior-year quarter.

Barring one-time adjustments, the company posted GAAP earnings of 39 cents per share compared with 75 cents in the year-ago quarter.

The year-over-year downside can be attributed to higher operating expenses that the company incurred in the first quarter.

SolarEdge Technologies, Inc. Price, Consensus and EPS Surprise

SolarEdge Technologies, Inc. Price, Consensus and EPS Surprise | SolarEdge Technologies, Inc. Quote

Revenues

SolarEdge’s revenues of $271.9 million in the first quarter surpassed the Zacks Consensus Estimate of $265 million by 2.4%. The top line also surged 29.5% from the year-ago quarter’s $209.9 million, on account of solid shipments.

Operational Highlights

SolarEdge shipped a total of 1.1 Gigawatts (AC) of inverters in the reported quarter.

Gross profit totaled $86.1 million, up 8.2% from $79.6million a year ago.

Total operating expenses increased 49.5% year over year to $58.1 million. The uptick can be attributed to higher research and development, sales and marketing as well as general and administrative expenses.

Operating income during the quarter totaled $28 million, down 31.1% from $40.8 million in the year-ago quarter.

Financial Performance

SolarEdge had $226.5 million of cash and cash equivalents, as of Mar 31, 2019, up from $191.6 million at the end of 2018.

Cash flow from operating activities amounted to $56.5 million at the end of first quarter 2019, down from $64 million a year ago.

Long-term liabilities were $231.3 million at the end of the first quarter compared with $168 million as of Dec 31, 2018.

Guidance

For second-quarter 2019, SolarEdge expects to generate revenues in the range of $310-$320 million. The Zacks Consensus Estimate for the same is pegged at $283.8 million, much lower than the company’s guided range.  

Additionally, revenues from solar products during the second quarter are projected to be between $290 million and $300 million.

While the company’s GAAP gross margins are expected to be 32-34%, gross margins from the sale of solar products are anticipated to be 33-35%.

Zacks Rank

SolarEdge currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Solar Releases

SunPower Corp. SPWR is slated to release its first-quarter 2019 results on May 9. The company carries a Zacks Rank #2 (Buy).

Sunrun Inc. RUN is scheduled to release its first-quarter 2019 results on May 8. The company sports a Zacks Rank of 1.

A Recent Solar Release

First Solar Inc. FSLR incurred a loss of 64 cents per share in first-quarter 2019, wider than the Zacks Consensus Estimate of a loss of 13 cents. The reported figure also deteriorated significantly from the prior-year quarter’s earnings of 78 cents.

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