By Enphase Energy, a leading maker of solar-power equipment, has projected that the current slowdown in solar-product sales will persist through the first quarter of 2024. This announcement caused a 17% drop in the company’s stock during aftermarket trading.
In its recently released third-quarter earnings report, Enphase Energy managed to slightly surpass expectations. The company recorded per-share earnings of $1.02, slightly higher than the expected $1.01.
Despite exceeding earnings estimates, Enphase Energy’s forecast for fourth-quarter sales disappointed investors and analysts alike. The company expects sales to range between $300 million and $350 million, significantly lower than analysts’ projection of $579 million.
The decline in solar-power stocks over the past few weeks can be attributed to a decrease in demand for rooftop solar systems among homeowners. The high interest rates prevalent at the moment have deterred potential buyers due to increased costs associated with large capital purchases. Moreover, recent changes in California’s rules have made solar power less economically competitive compared to other forms of electricity. Economic pressures in Europe have also impacted sales in the region, as stated by Enphase CEO Badri Kothandaraman.
In light of this challenging situation, Kothandaraman remains optimistic that the European market will rebound from its current setback. He believes that the decline in demand will only be temporary.
Following this news, Enphase Energy’s stock plummeted by 17% to $79.61 during Thursday evening trading. Even prior to this decline, the stock had already experienced a decrease of over 60% throughout 2023.
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