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SolarCity’s shares plunge as growth targets are missed in fourth quarter

SolarCity’s shares plunged in after-hours trading Tuesday after the solar energy systems installer fell short of its fourth-quarter growth targets and warned that its first quarter would be unusually weak because of its decision to stop installing rooftop solar systems in Nevada after regulators there slashed incentives.

The disappointing fourth-quarter results, which SolarCity announced after the stock market closed, prompted a steep sell-off in the company’s shares in after-hours trading, with the stock tumbling at one point by $8.85, or 33.59 percent, to $17.50.

SolarCity said it installed 272 megawatts of new solar energy systems during the final three months of the year. That was up by 55 percent from a year ago, but less than the company’s forecast that its installations would range between 280 and 300 megawatts.

SolarCity blamed the shortfall on delays to three big commercial solar projects on the East Coast that were slowed by challenging terrain conditions.

The company also warned that the current quarter would be soft, with installations rising by 18 percent, to 180 megawatts, which SolarCity described as a “higher-than-usual seasonal slowdown,” largely stemming from its pullout from Nevada, where it installed 23 megawatts of new solar capacity during the fourth quarter.

Despite the expected slow start to the year, SolarCity said that it still expects to install 125 gigawatts of new solar capacity this year, matching its previous forecast and 43 percent more than the 870 megawatts of capacity that it installed in 2015.

SolarCity’s shares have been highly volatile since last fall, when the company said that it was scaling back its growth plans and focusing more on generating enough cash from its business to fund its operations.

The shares, which had tumbled to $24 in mid-November, shot up to just under $59 in mid-December after the federal government extended a key tax credit for the solar industry.

But the shares began falling again after Nevada regulators scaled back incentives for the solar industry, prompting fears that other states would follow its lead.

Uneasiness about SolarCity’s ability to meet its scaled-back growth targets and further reduce its costs so it can generate more cash from its operations than it uses spurred a steady decline this month that pushed the shares down by 5.69 percent, or $1.59, to close at $26.35 on Tuesday, before the earnings announcement.

The company, with $750 million in incentives from New York State, plans to open one of the world’s biggest solar panel factories at RiverBend in South Buffalo later this year. The factory, a centerpiece of the state’s Buffalo Billion economic-development initiative, is expected to employ 1,460 workers, with ad additional 1,440 jobs at the plant’s suppliers.

SolarCity reported a loss of $2.37 per share during the fourth quarter, less than the loss of $2.59 per share that analysts had expected. Its revenues of $115.5 million topped analysts’ forecasts of $105.6 million.

The company said that it expects to lose between $2.55 and $2.65 a share, in the first quarter, more than the $2.36 that analysts were predicting.

email: drobinson@buffnews.com