US solar company Enphase Energy reported market-beating earnings in the first quarter on strong sales in Europe, but the share price tumbled in after-hours trading on Tuesday as second-quarter sales outlook was expected to be below Wall Street projections.
The Fremont, Calif.-based company forecast second-quarter revenue between $700 million and $750 million. That’s below Refinitiv’s analyst estimate of $773 million.
Shares of Enpayz (NASDAQ:ENPH) fell 16.59% to $184.00 in after-hours trading on Tuesday.
Raymond James analyst Pavel Molchanov believes California’s net metering reforms will create a headwind for Enphase in the second quarter, but “the company is doing very well in Europe.” The two factors “will essentially cancel each other out,” he added.
The new policy changes so-called “net metering,” a policy that has been around for decades, allowing homeowners with solar panels to sell their excess power to utilities at or near full retail rates.
U.S. solar panel imports recently rose after months of stalemate due to the implementation of a new law banning products made with forced labor, Reuters reported in March.
During the first quarter, IQ8 microinverters, used to convert solar heat into usable AC power, accounted for approximately 65% of all microinverter shipments from Enphase.
Enphase shipped 4.8 million microinverters, a 71% increase from the same quarter last year. However, during the quarter, battery shipments of 102.4 megawatt-hours were down 16% from last year.
The company said earnings came in at $1.37 per share, beating analysts’ average estimate of $1.20.
Revenue increased 65% to $726 million, primarily driven by increased sales in Europe. In February, Enphase had expected first-quarter sales to be between $700 million and $740 million.
Raymond James’ Molchanov forecast sales to increase in the second half after remaining flat in the second quarter.
In March, the company said that shipments of microinverters from Romania are expected to begin in the second quarter of this year.
The next earnings release date is July 24th.