Bad news the for hedge fund hotel.
The shares of Sunedison are plummeting today after the company reported its financial results for the third quarter. Investors were disappointed because the company posted losses.
The stock price of Sunedison was down more than 18% to $6.00 per share at the time of this writing around 12:25 in the afternoon in New York.
The LF Brook Absolute Return Fund lost -2.52% in the second quarter of 2021, compared to a positive performance of 7.59% for its benchmark, the MSCI Daily TR Net World Index. Year-to-date the fund has returned 4.6% compared to 11.9% for its benchmark. Q2 2021 hedge fund letters, conferences and more According to a copy Read More
Over the past 52 weeks, the company’s stock declined from its highest trading price of $33.45 to as low as $5.59 per share. Sunedison lost 69% of stock value year-to-date.
Sunedison 3Q financial results
Sunedison reported a loss of $0.91 per share for the third quarter. Wall Street analysts expected the company to post a loss of $0.70 per share. During the same period a year ago, the company recorded a loss of $1.06 per share.
The company reported net sales of $476 million, up from $469 million in the same period last year.
Sunedison delivered 640 MW of energy during the quarter, higher than its guidance in the range of 540 MW to 600 MW. According to the company it has 2.9 GW of projects under construction and 7.9 GM pipeline and 5.5 GW backlog.
The company’s TerraForm Power delivered adjusted revenue of $153 million. The business has $71 million cash available for distribution and increased the dividend to $0.35 per share.
The TerraForm Global posted adjusted revenue of $29 million. It has 677 MW operating fleet and $24 million cash available for distribution. The company’s board declared a dividend of $0.17 per share during the quarter.
Sunedison streamlined its organization and global footprint and implemented opex improvement to reflect the current Yieldco conditions.
In a statement, Sunedison CEO Ahmad Chatila said, “We made the difficult, but necessary decision to optimize our organization in the face of the current market conditions within the yieldco space. These changes will not only set up the business for long-term success but also should position the development business to generate positive cash flow in mid-2016.”
For the fourth quarter, Sunedison expected to achieve around $80 million to $90 million unlevered annualized CAFD for retained MW. The company expected to deliver total energy of around 833 MW to 933 MW and third part sales of around 318 MW to 343 MW. The company estimated to achieve 515 to 590 retained MW.
For the full-year 2015, Sunedison expected to deliver approximately $261 million to $271 million unlevered annualized CAFD for retained MW. The company expected to deliver total energy of around 2,150 MW to 2,250 MW and third party sales of about 540 MW to 565 MW. Its expected retained MW is around 1,610 to 1,685.
Credit Suisse analyst Patrick John and his colleagues maintained their Outperform rating on Sunedison with a price target of $25 per share. The analysts liked the company’s improving margins and focus on profit and cash generation.
The analyst noted that the continued underperformance of the stock was driven by the selloff on TERP/GBL. They noted four catalysts for Sunedison to regain confidence including
• management addressing the materials segment P&L drag
• securing an emerging-market or residential warehouse facility for 2016 capital needs (assuming TERP/GBL do not purchase assets)
• clarity on NEM 2.0 policy in California
• closing or restructuring the VSLR acquisition
• achieving opex/wait kleverage and gross margin improvement in 2016
On the other hand, RBC Capital Markets analyst Mahesh Sanganeria noted that most of the upside achieved by Sunedison for the third quarter came from third-party system sales.