SolarCity in a Fog, Cloudier Days Ahead

Solar rooftop installation
Solar rooftop installation

SolarCity Corp. (NASDAQ: SCTY) reported second quarter 2013 earnings after markets closed today. For the quarter, the solar PV installer posted an adjusted earnings per share (EPS) loss of $0.43 on revenues of $46.57 million. In the same period a year ago, the company reported an EPS loss of $2.37 on revenues of $37.95 million. Second-quarter results compare to the Thomson Reuters consensus estimates for an adjusted EPS loss of $0.38 and $27.44 million in revenues.

The GAAP loss for the second quarter totaled $0.31 and did not include $3.98 million in income from non-controlling interests.

The company's outlook for the third quarter includes an adjusted EPS loss of $0.50 to $0.60. SolarCity expects to deploy 70 to 77 megawatts of new solar projects during the quarter, with a gross margin of 30% to 40%. Revenues from leasing are expected at $21 to $23 million and systems sales revenues are expected at $15 to $25 million. Operating expenses are pegged at $45 to $50 million.

The leasing revenue forecast is slightly higher than the $20.6 million that SolarCity booked in the second quarter, and the anticipated sales revenue is sharply lower than the $35 million in the second quarter. And to add insult to injury, the operating expense forecast is much higher than the $35.61 million posted in the second quarter.

Prior to today's results the consensus analysts' estimate for the third quarter included an EPS loss of $0.38 on revenues of $41.24 million. SolarCity does not expect to hit either one.

We noted in our preview of SolarCity's earnings earlier today that the company enjoys a halo effect from its association with Elon Musk, its chairman and the CEO of Tesla Motors Inc. (NASDAQ: TSLA). Tesla posted another surprisingly solid quarter today, so the Musk glow is clearly not enough.

Shares are down more than 8% in after-hours trading at $39.06 in a 52-week range of $9.20 to $52.77. The consensus target price for the shares was around $33.00 before today's report.

Filed under: Technology Tagged: SCTY, TSLA