SolarCity Corp (SCTY) Earnings Preview: Focus On Expansion Of Deployment


SolarCity Corp (NASDAQ:SCTY) would reveal its financial numbers on February 18 after the market closes. The focus would be on the deployment of power to the grid in the fourth quarter. The solar industry is still early in the cycle of investment. At this stage, every dollar the company generates, they plan on reinvesting every nickel with as much leverage as rational for a long time.

Next Power Market

SolarCity Corp (NASDAQ:SCTY) has already disclosed that it was anticipating deployment of 179 – 194 MW of power in the fourth quarter. This would indicate an increase of 81% on YOY basis and 36% from the third quarter level. The company said during the third quarter financial results announcement that it was carrying on the momentum it witnessed in the third quarter through strong execution.

According an article in Forbes by energy analyst, Prajit Ghosh, said there was no technology that was close to transforming power sector than the Solar energy. It was mush similar to the shale extraction that reshaped oil and gas sector. This indicates the kind of market and the growth potential of the solar sector enjoys currently.

SolarCity Corp (NASDAQ:SCTY) also indicated that the execution of deployment of solar power would take the total deployment in 2014 to 505 – 520 MW, which meant that mid-point represented 83% YOY growth.

Earnings Expectations

On average, Street analysts’ estimated the company to suffer a loss of $1.27 a share and revenue of $71.75 million in the fourth quarter. This meant the losses would have been wider compared to the year-ago quarterly loss of 46 cents a share. However, analysts’ were projecting 51.7% increase in revenue to $71.75 million in the December quarter.

While releasing third quarter results, SolarCity Corp (NASDAQ:SCTY) guided adjusted loss per share of $1.25 – $1.35 for the fourth quarter. In the preceding year fourth quarter, the company suffered a narrower loss of 46 cents a share and revenue of $47.30 million.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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