SolarCity Corp Shares Nosedive On Wider Loss, Weak Guidance

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SolarCity installed 502 megawatts of panels in 2014, and aims for 1GW installations this year

SolarCity shares plunged 6.69% to $53.28 after the company reported fourth-quarter earnings that missed consensus estimates. Its guidance for the current quarter missed analysts’ projections by a mile. The San Mateo-based company ramped up solar installations ahead of the federal tax-credit cut. The solar tax credit is set to decline from 30% to 10% in 2017.

SolarCity’s bookings more than double to 206MW

Revenue for the quarter ending December jumped 52% YoY to $71.8 million. But the company reported a loss of $1.47 per share on non-GAAP basis. Analysts polled by FactSet had been modeling $71.8 million in revenue and $1.27 a share in losses. SolarCity said its net loss would have been only $1.33 per share were it not for $7.1 million in operating expenses and $6.3 million in other expenses “that were expensed rather than capitalized.

SolarCity’s own guidance had called for Q4 loss of between $1.25 and $1.35 per share on revenue between $67 million and $76 million. Revenue from solar leases doubled to $49.2 million, but solar system sales declined 9% to $22.6 million. SolarCity CEO Lyndon Rive said the company’s gross margin on component sales and system sales was negative 17%.

The San Mateo-based company installed 176MW of solar panels during the quarter, up 70% from the same quarter previous year. Of that, 147MW were residential projects. Rive expects the commercial segment to contribute 15-20% of the company’s total business going forward. Bookings more than doubled from the prior-year period to 206 megawatts.

SolarCity’s Q1 guidance disappoints investors

Overall, SolarCity installed 502 megawatts of panels during full-year 2014. The company said it added 21,318 customers during the quarter, exiting 2014 with close to 190,000 customers. SolarCity aims to have one million customers by the end of 2018. For FY2015, the company expects installations to reach 920MW to 1,000MW.

For the current quarter, the company guided a loss in the range of $1.65 to $1.75 per share, worse than $1.25 per share net loss projected by analysts. SolarCity expects first-quarter revenue between $53 million and $60 million, reflecting seasonal weaknesses. Analysts have called for $71.8 million Q1 revenue. SolarCity expects its operating expenses to jump from $134.9 million in Q4, 2014 to a range of $148 million to $156 million this quarter.

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