Enphase Energy Inc., a prominent player in the solar and alternative-energy markets, recently unveiled its projections for the upcoming quarter, prompting a sharp downturn in its stock price during after-hours trading. The company’s forecast for second-quarter revenue, ranging between $290 million and $330 million, fell short of analysts’ expectations, who had anticipated revenue to reach $347 million. This shortfall in revenue outlook hints at potential headwinds facing the company’s business operations. For context, Enphase had reported robust revenue of $711 million during the same quarter in the previous year.
Adding to the concerns, Enphase also reported a substantial decline in revenue for the first quarter of the year. The company’s first-quarter revenue figures amounted to $263 million, a stark contrast to the $726 million recorded in the corresponding period last year. Analysts, on average, had projected first-quarter revenue to reach $276 million. This downward trend in revenue, particularly in the U.S. market, where revenue dropped by approximately 34% sequentially, was partially offset by a notable 70% sequential increase in revenue from Europe.
Following the release of these disappointing financial figures, Enphase’s stock experienced a significant decline of about 6% during extended trading hours, despite having shown a modest 2.6% gain during regular trading.
In terms of financial performance, Enphase reported a net loss of $16.1 million, or 12 cents per share, for the first quarter. This contrasts sharply with the net income of $146.9 million, or $1.02 per share, recorded during the same period last year. Adjusted earnings per share for the first quarter stood at 35 cents, down from $1.37 per share reported a year earlier and below the consensus estimate of 41 cents per share.
The solar industry as a whole has faced challenges in 2024, with concerns emerging regarding demand dynamics, leading to downward pressure on related stocks. Enphase shares, for example, have seen a decline of 14% year-to-date and 49% over the past 12 months. Similarly, other industry players like Sunrun Inc. and SunPower Corp. have also experienced significant declines in their stock prices, down 48% and 59% respectively since the beginning of the year.
Last year, in response to the challenging economic environment, Enphase announced layoffs affecting approximately 10% of its workforce. The company viewed these measures as necessary to align its business operations with prevailing economic conditions and maintain its competitiveness in the market.