SolarEdge Stock Shines after Delivering Q2 Earnings Beat


The post SolarEdge Stock Shines after Delivering Q2 Earnings Beat appeared first on Millennial Money.

Shares of SolarEdge Technologies (NASDAQ: SEDG) are shining bright after the company reported second quarter earnings on Monday evening.

The results easily topped the market’s expectations, and the solar inverter specialist offered investors a rosy outlook for next quarter despite ongoing supply chain challenges.

As of 12:30 p.m. EDT, SolarEdge stock was up by 15%.

Navigating a challenging supply chain situation

Revenue in the second quarter increased 18% to $480.1 million, comfortably above the consensus estimate of $455.7 million in sales. Revenue from the core solar segment was $431.5 million, comprising 90% of total revenue.

During the quarter, SolarEdge shipped approximately 5 million power optimizers and 180,000 power inverters. 

The non-solar business generated $49 million in revenue, which was primarily attributable to increasing production of powertrain units and batteries for Stellantis (NYSE: STLA) subsidiary Fiat and its e-Ducato light commercial vehicle.

SolarEdge scored that contract earlier this year as the Italian automaker is looking to electrify 60% of its vehicle lineup by the end of 2021.

“We are happy to finish the second quarter of 2021 with record revenues in both our solar and non-solar businesses and with continued strong demand for our products in the various geographies and across the different segments,” CEO Zvi Lando commented in a statement. “We are successfully navigating through the challenging supply chain environment while continuing to support our customers’ growth and expansion with new and existing products.”

Just about every industry is being impacted by the global chip shortage, and the solar sector is no exception. SolarEdge has been navigating the difficult logistics environment by implementing a multisource strategy.

For example, a manufacturing partner’s facility in Vietnam is currently operating at reduced capacity due to the pandemic, but SolarEdge was able to increase output at other factories in China, Hungary, and Israel. That may result in higher tariffs and freight costs.

Adjusted net income came in at $72.5 million, or $1.28 per share. Investors were expecting just $1.11 per share in adjusted profits.

A bright outlook

Guidance for the third quarter was also strong, with revenue forecast in the range of $520 million to $540 million. Analysts are currently looking for $503.4 million in sales. Solar segment revenue is expected to be $460 million to $480 million of that total. The adjusted gross margin should be 32% to 34%.

SolarEdge expects to ship 25 megawatt-hour (MWh) to 30 MWh of batteries in the third quarter as the company ramps up production. In order to accommodate growing demand for battery storage in residential systems, SolarEdge has inked a supply agreement with Samsung for 1 gigawatt-hour (GWh) of cells in 2022.

On the conference call with analysts, Lando noted that SolarEdge has now enjoyed three consecutive quarters of strong growth in its residential products. 

The company will pass along some of the higher freight costs to customers in the form of modest price increases in the third quarter.

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The post SolarEdge Stock Shines after Delivering Q2 Earnings Beat appeared first on Millennial Money.


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