Enphase Energy shares on the NASDAQ after-hours +12%: Enphase Energy reports decline in sales and profits – but dry spell soon overcome

• Profit and sales were lower
• Analyst expectations missed
• Group management sees challenges almost overcome

Enphase Energy faces setbacks in earnings

Solar energy expert Enphase Energy says it is the world’s leading provider of microinverter-based solar-plus-storage systems, bringing solar power generation, storage and energy management together on a single platform. Figures for the fourth quarter of 2023 presented yesterday, Tuesday, caused price fluctuations on the home stock exchange NASDAQ.

For the fourth quarter of 2023, Enphase Energy earned $20.919 million, or $0.15 per share. Adjusted for one-time factors (non-GAAP), earnings per share were $0.54. Analysts surveyed by FactSet had estimated a value of 0.54 U5 dollars. In the same quarter last year, however, the company’s earnings were $153.953 million, or $1.06 per share.

Sales impacted by high inventory levels in Europe

Enphase Energy also suffered a significant decline in sales. From the previous figure of 724.652 million US dollars, it fell by 58 percent to 305.570 million US dollars. According to FactSet, the analyst estimate here was $328 million. Losses in sales were particularly noticeable in Europe, as the company’s publication shows. Here Enphase reported a decline of 70 percent compared to the third quarter of 2023, which was explained primarily by delivery reductions that were due to increasing inventories at sales partners.

Challenges for the solar industry in the USA too

As a report by the news agency “Reuters” shows, the solar industry in Europe is currently suffering from high inventories and correspondingly lower sales. But the situation in the USA also looks anything but rosy. Last year, California implemented a metering reform that lowered the credit that households with rooftop solar panels receive for feeding excess electricity into the grid. According to the agency, high loan interest rates are also causing demand in the USA to dwindle.

“Weakening phase” over

But at Enphase Energy one thing is certain: the dry spell has been overcome. “We have come through a period of weakening demand. We believe that Q1 could be the bottom. There are already early signs of recovery in Europe and we expect non-California states to recover quickly.” , the agency quotes Enphase CEO Badri Kothandaraman. The company leader expects that inventories in Europe will soon return to normal and demand for the company’s products will recover accordingly.

However, in the current first quarter of 2024, demand is expected to fall by 10 percent due to seasonal factors. Kothandaraman expects revenue between $260 million and $300 million, which would be below the fourth quarter of 2023. This includes deliveries of products amounting to 70 to 90 megawatt hours.

This is how Enphase Energy shares react

The news was well received on the stock market – even though not only the figures for the previous year’s quarter, but also the analysts’ expectations were not met. Enphase shares ended Tuesday’s session 2.77 percent higher at $100.51 on the NASDAQ. In after-hours trading, the price temporarily rose by another 12.44 percent to $113.01.

Truist Securities analyst Jordan Levy explains the positive reaction by saying the numbers were “good enough,” as he noted in a note obtained by MarketWatch. Investors may have received the signal that Enphase is on the right track. Despite the recent price gains, the solar share still has a long way to go: in the past twelve months, the stock suffered losses of 54.08 percent. Since the beginning of the year it has fallen by 23.94 percent.

Editorial team finanzen.net

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