SolarCity Corp (SCTY) Shares Jump After Q1 Earnings Results

SolarCity Corp (SCTY) Shares Jump After Q1 Earnings Results
By BrokenSphere (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons

SolarCity Corp (NASDAQ:SCTY) released its earnings numbers for the first three months of 2014 on Wednesday after the market closed on Wall Street. The company’s accounts showed a loss per share of 82 cents for the three months, which SolarCity records as its first quarter of fiscal 2014. Revenue came in at $63.5 million for the period according to the company’s release. On today’s market shares in SolarCity lost a huge amount of  ground on a tough day. The company’s stock closed at $47.71.

In the run up to the release of this afternoon’s earnings report analysts were expecting to see strong growth from Elon Musk’s solar concern. Analysts were looking for revenue of $53.4 million from the company in the three months through March. In the same three months of 2013 the company brought in revenue of $30 million. The company was expected to lose 74 cents a share in the three months, about double its losses last year.

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SolarCity growth continues to impress

Its clear that the stock market was impressed by the better than expected returns from SolarCity Corp (NASDAQ:SCTY). The company’s stock was up by more than 4% in the immediate moments after releasing its earnings numbers. The company certainly beat its sister company Tesla, which beat expectations but still managed to lose a chunk of value after its numbers were released.

SolarCity’s revenue growth over the last year has been incredibly impressive and the company’s future seems to be regarded with optimist despite the problems the firm is having keeping its costs down. Today;s greater than expected loss highlighted the company’s issues with variable costs, and the trouble it will eventually have with cash flow because of its burning of currency.

SolarCity still valued incredibly

The market values SolarCity Corp (NASDAQ:SCTY) at more than $4 billion despite the company’s tiny annual revenue and regular annual loss. The potential in the Solar industry seems to be enough to attract investors into a stock that is, for all intents and purposes, financially unsound.

SolarCity is backed by Elon Musk, and that commands a premium in today’s market. The company is still valued at a high level, however, and firms with relatively large price tags are being hit hard. The future of the company’s shareholders may rest in the hands of market dynamics rather than company performance.

SolarCity Corp (NASDAQ:SCTY) management will host a conference call at 5 PM EST in order to discuss this afternoon’s earnings with analysts and investors. Those on the call will be looking to hear about the company’s guidance for the rest of the year, and the company’s outlook on the solar industry as a whole for the rest of the year.

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