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SolarEdge (SEDG) Q2 Earnings Beat Estimates, Revenues Up Y/Y

Zacks Equity Research

SolarEdge Technologies, Inc. SEDG reported second-quarter 2019 adjusted earnings of 94 cents per share, which surpassed the Zacks Consensus Estimate of 86 cents by 9.3%. The bottom line, moreover, rose 14.6% from 82 cents in the prior-year quarter.

Barring one-time adjustments, the company posted GAAP earnings of 66 cents per share compared with 72 cents in the year-ago quarter.

The year-over-year downside in the GAAP earnings can be attributed to higher operating expenses in the second quarter.

Revenues

SolarEdge’s revenues of $325 million in the second quarter surpassed the Zacks Consensus Estimate of $315 million by 3.2%. The top line also surged 43.1% from the year-ago quarter’s $227.1 million on solid shipments.

Operational Highlights

SolarEdge shipped a total of 1.3 Gigawatts (AC) of inverters in the reported quarter.

Gross profit totaled $110.7 million, surged 35% from $81.9 million a year ago.

Total operating expenses soared 58.2% year over year to $65.3 million. The uptick can be attributed to higher research & development, sales & marketing and general & administrative expenses.

Operating income during the quarter totaled $45.4 million, up 11.5% from $40.7 million in the year-ago quarter.

Financial Performance

SolarEdge had $176.6 million of cash and cash equivalents as of Jun 30, 2019, up from $187.8 million at the end of 2018.

Cash flow from operating activities amounted to $107.2 million at the end of second-quarter 2019, down from $107.9 million a year ago.

Long-term liabilities were $247.9 million at the end of the second quarter compared with $168 million as of Dec 31, 2018.

SolarEdge Technologies, Inc. Price, Consensus and EPS Surprise

SolarEdge Technologies, Inc. Price, Consensus and EPS Surprise

SolarEdge Technologies, Inc. price-consensus-eps-surprise-chart | SolarEdge Technologies, Inc. Quote

Guidance

For third-quarter 2019, SolarEdge expects revenues of $395-$410 million. The Zacks Consensus Estimate for the same is pegged at $314.7 million, much lower than the company’s guided range.  

Additionally, revenues from solar products in the third quarter are projected to be $375-$390 million.

While the company’s GAAP gross margin is expected to be 32-34%, gross margin from the sale of solar products is 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.

Recent Solar Releases

SunPower Corp. SPWR incurred adjusted loss of 22 cents per share in the second quarter, wider than the Zacks Consensus Estimate of a loss of 9 cents. The company had incurred a loss of a penny per share in the year-ago quarter.

Enphase Energy, Inc. ENPH reported second-quarter 2019 adjusted earnings of 18 cents per share, which surpassed the Zacks Consensus Estimate of 13 cents by 38.5%. The bottom line, moreover, improved from a penny registered in the prior-year quarter.

First Solar Inc. FSLR incurred a loss of 18 cents per share in second-quarter 2019, while the Zacks Consensus Estimate for earnings was pegged at 2 cents. The reported figure, however, improved from the prior-year quarter’s loss of 46 cents per share.

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