SolarEdge Technologies Inc. late Thursday cut its outlook for third-quarter profits and gross margins and said it expects “significantly lower” fourth-quarter revenue as it faced a slowdown in solar-power installations in Europe.
SolarEdge’s stock SEDG, -5.63% fell more than 15% in the extended session. The maker of inverters and other equipment used in solar-power systems said that the slowdown was “unrelated” to the Israel-Hamas war.
“During the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and pushouts of existing backlog from our European distributors,” SolarEdge Chief Executive Zvi Lando said.
The company attributed the cancellations and pushouts to higher-than-expected inventory and slower-than-expected installation rates.
Installation rates for the third quarter “were much slower at the end of the summer and in September, where traditionally there is a rise in installation rates.”
“The adjusted guidance is unrelated to the tragic events that have unfolded in Israel,” the company said.
SolarEdge expects third-quarter revenue to be in a range between $ 720 million and $ 730 million, which compares with a previous expectation of between $ 880 million and $ 920 million.
Adjusted gross margins are seen between 20.1% and 21.1%, versus a prior forecast of between 28% and 31%.
Adjusted operating income is expected to be in a range between $ 12 million and $ 31 million, whereas the company previously called for $ 115 million to $ 135 million.
SolarEdge said it will report full third-quarter results after the bell on Nov. 1. Analysts polled by FactSet expect the company to report adjusted earnings of $ 1.86 a share on revenue of $ 910 million.
The guidance cut at SolarEdge dragged down other solar power-related stocks in the after-hours session, with shares of microinverter maker Enphase Energy Inc. ENPH, -6.41% off 13% and solar-panel maker SunPower Corp. SPWR, -2.28% shares down 7%. Shares of the Invesco Solar ETF TAN dropped 7%.