Weakening Demand: Enphase Share Price Slumps After Quarterly Figures

Fremont, USA - US technology company Enphase Energy has reported financial results for the third quarter of 2023. Revenue and profit fell significantly compared to the previous quarter. Overall, Enphase missed analysts' expectations and the stock slumped.

The RENIXX group, which is one of the world's leading suppliers of solar and battery systems based on microinverters, reported quarterly revenue of $551.1 million (USD million) in Q3 2023. This puts the company at the lower end of its own forecast ($550 - $600 million). Analysts on average had expected revenue of $566 million.

Enphase attributed the performance to macroeconomic conditions that resulted in U.S. Q3 revenue declining about 16 percent from Q2 2023. In Europe, Q3 2023 revenue is down as much as 34 percent compared to Q2, which Enphase says is due to high distributor inventories and softening demand in key markets in the Netherlands, France and Germany.

On balance, GAAP standard net income remains at $114 million, only slightly below the net income of the prior year quarter (Q3 2022: $114.8 million), but significantly below the previous quarter (Q2 2023: $157.2 million). This results in Q3 diluted earnings per share of $0.80 (Q2 2023: $1.09/share).

For Q4 2023, Enphase now expects revenue to be between $300 million and $350 million. Compared to Q4 2022, this would be a significant decline of between 52 and 59 percent (Q4 2022 revenue: $724.7 million). Moreover, the forecast is significantly below analysts' expectations, whose median estimate is $571 million.

The third quarter results, as well as the outlook for the fourth quarter, disappointed investors. Enphase shares slump 22.1 percent to a price of 71.23 euros by midday in today's trading (11:52 a.m., Oct. 27, 2023 Stuttgart Stock Exchange). Compared to the price at the turn of the year, this currently results in a minus of more than 70 percent.

Source: IWR Online, 27 Oct 2023