“This has been a volatile time across the solar industry with changes in important policies and rising interest rates, leading to difficult conditions in the sector,” Sunrun Chief Executive Officer Mary Powell said during Wednesday’s quarterly earnings call. In response, Sunrun is focused on cutting costs and selling higher-margin home batteries, Powell said.
Sunrun shares fell more than 7% in post-market trading after it reported revenue that fell short of analyst estimates and lowered its full-year solar installation forecast. The company reduced its goodwill primarily tied to its all-stock acquisition of Vivint by $1.2 billion, resulting in a $1.5 billion third-quarter loss.
Sunrun bought Vivint at a time when investors were eager to fund clean energy companies because of their green credentials. The tie-up created a rooftop solar juggernaut when installations were expected to rise as the industry worked its way back from the worst of the coronvirus pandemic. Now, installations have slowed with inflation and other economic headwinds.
SolarEdge, which warned two weeks ago that results would be weaker than expected due to slack demand, estimated fourth-quarter revenue of $300 million to $350 million, far below analysts’ expectations of $719 million. The lackluster sales projection comes as Europe is working through a glut in solar equipment that has dragged down many companies doing business there.
Last year, Europe’s demand for solar arrays surged as Russia’s invasion of Ukraine threatened the continent’s supply of natural gas and drove up power prices. SolarEdge scrambled to fill all the orders, Chief Executive Officer Zvi Lando told analysts Wednesday during the company’s third-quarter earnings call.
Now that power prices have dropped, Europe is awash in equipment, he said, and that oversupply will take two to three quarters to correct. After demand recovers, the company forecasts quarterly revenue to range between $600 million and $700 million.
“We are firm believers not only in the long-term but in the mid-term trajectory of this market,” Lando said.
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