Enphase posts report quarter. Inventory slides on chip scarcity pains

Solaray Director Jonathan Fisk strikes a photo voltaic panel on the solar energy set up firm’s Sydney facility.

Jason Reed | Reuters

Shares of Enphase Power dropped greater than 14% on Wednesday after the corporate warned concerning the ongoing impacts of the chip scarcity.

The corporate — which makes microinverters for photo voltaic techniques — reported on Tuesday first-quarter earnings and income that beat analyst estimates. Enphase additionally posted report gross sales numbers. However weak second-quarter steering despatched the inventory tumbling.

Enphase expects gross sales to come back in between $300 million and $320 million throughout the second quarter, in comparison with Road projections of $320.7 million, in keeping with estimates compiled by FactSet.

“Trying to Q2, our cargo volumes can be constrained by semiconductor element availability,” Enphase President and CEO Badrinarayanan Kothandaraman mentioned on the corporate’s earnings name.

“Though we’re rising the capability of photo voltaic microinverters each quarter and the demand is rising each quarter, the provision is unable to maintain up with demand due to semiconductor constraints, element constraints,” he added, noting this can result in a “slower ramp” starting within the third quarter.

Chip-shortage pains

Enphase’s inventory gained 571% in 2020, making it one of many market’s top-performing names. However for 2021, the inventory is now down greater than 16%.

Nonetheless, Goldman Sachs, JPMorgan and Barclays have been among the many Wall Road corporations that really useful shopping for the dip.

“The silver lining is clear to us: these trying to take the long-view on ENPH will appropriately view this ultimately transient headwind, as a shopping for alternative on any weak spot,” famous Barclays, whereas Goldman mentioned that “demand and margins stay sturdy.”

Kothandaraman mentioned on the earnings name that the corporate will work with new suppliers, however that element constraints will stay for the remainder of the 12 months.

CNBC’s Jim Cramer mentioned Tuesday night that he is nonetheless a believer within the firm. He famous on “Mad Cash” that he would begin a half place at present ranges, then wait on the opposite half to see how issues shake out. Given the corporate is without doubt one of the high performers over the previous 5 years, he mentioned it is change into a “high-multiple casualty the place individuals say ‘overlook about it.'”

—CNBC’s Michael Bloom contributed reporting.

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