Enphase Energy reported third-quarter results after the market closed Tuesday, Oct. 27. Revenue was $293.3 million and adjusted earnings were 41 cents a share. Investing.com reported that both missed analysts' estimates of $303.85 million and 51 cents a share.
The forecast did more damage. Enphase expects fourth-quarter revenue of $225 million to $255 million. The $240 million midpoint is well below the roughly $300.5 million analysts expected, and the company expects sell-through to decline another 10% from the third quarter. Investing.com reported that the stock fell 14.3% after hours, toward its 52-week low of $25.78.
Why demand is weak
- U.S. sell-through fell 35% from a year earlier.
- European sell-through fell 12% from the prior quarter, with weakness in markets such as France.
- CEO Badri Kothandaraman cited "higher interest rates and the expiration of the Section 25D federal tax credit," the homeowner solar credit, as headwinds for U.S. residential solar.
The bigger picture
Investing.com noted that the broader market was roughly flat Tuesday, so the drop was specific to Enphase. Management also pointed to longer-term opportunities, including an IQ Solid-State Transformer product aimed at AI data centers. Deutsche Bank had downgraded the stock earlier in October.