SolarCity's Third-Quarter Sales Impress, but Earnings Don't; Shares Plummet 10% After Hours
California-based solar energy service provider SolarCity just reported third-quarter earnings, crushing Wall Street's revenue estimates but falling short of bottom-line targets.
Analysts were looking for a non-GAAP net loss of $0.38 per share on sales around $41 million. SolarCity reported a $0.43 adjusted loss per share on nearly $49 million in total sales.
The company reported strong operating cash flows of $100 million, nearly triple the year-ago period's figure, but also invested heavily in new customer installations. Capital expenses nearly doubled to $217 million, and free cash was strongly negative.
As a reminder, SolarCity installs solar panels free to customers, recouping the cost later via long-term lease contracts -- hence the high capital expenses and the ballooning long-term contracts. Management tracks a metric known as estimated nominal contract payments remaining, which accounts for the unpaid portions of long-term lease deals. That figure stood at $500 million in 2011, $1 billion in the year-ago period, and $1.7 billion right now.
Investors ignored the strong revenues and latched on to SolarCity's weak profitability, sending shares nearly 10% lower in after-hours market action.
The earnings-related sell-off puts SolarCity prices at roughly $54 per share, which is 360% above the stock's year-ago price.
The article SolarCity's Third-Quarter Sales Impress, but Earnings Don't; Shares Plummet 10% After Hours originally appeared on Fool.com.Fool contributor Anders Bylund has no position in any stocks mentioned. Check out Anders' bio and holdings or follow him on Twitter and Google+.The Motley Fool recommends and owns shares of SolarCity. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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