- SolarEdge Technologies warned that its third quarter results would be well below previous forecasts due to a sharp decline in its European business.
- The solar energy company said that It had experienced a significant unexpected increase in cancellations and a reduction in the existing order book.
- Shares of SolarEdge Technologies lost more than a quarter of their value Friday morning after the news was announced.
Shares of SolarEdge Technologies (SEDG) fell after the solar power equipment provider warned of lower-than-expected quarterly results due to a drop in demand in Europe. Shares of other companies in the sector also fell.
SolarEdge CEO Zvi Lando noted that during the second part of the quarter, the company experienced “significant unexpected cancellations and removals of existing order backlog from our European distributors.” “. He also noted that installation rates in late summer and last month were much slower than usual, when rates normally climb.
For this reason, the company is significantly reducing its guidance for the third quarter. SolarEdge now expects revenue between $720 million and $730 million, down from its previous guidance of $880 million to $920 million. It expects gross margin of 20.1% to 21.1%, compared to the previous estimate of 28% to 31%, and operating profit of 12% to 31%. million, significantly lower than the previous projection of $115 million to $135 million.
SolarEdge headquarters is located in Herzliya, Israel, and Lando explained that the updated guidelines were not the result of the effects of the ongoing fighting between Israel and Hamas that began on October 7. The company's headquarters, offices and facilities are open worldwide, and manufacture and provide uninterrupted customer support.
SolarEdge expected to release its financial report on November 1st.
SolarEdge Technologies was the The worst-performing stock in the S&P 500 on Friday morning, with shares down more than 30% as of 10:30 a.m. ET, falling to their lowest level since the outbreak of the COVID-19 pandemic in 2020.
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