March 06--SAN MATEO -- SolarCity's first earnings report as a public company was a disappointment Wednesday, as the solar installer posted losses that more than doubled analysts' forecasts and saw its stock price descend.
The San Mateo-based solar installer posted a fourth-quarter loss of $3.04 million, or $1.10 cents a share, compared with net income of $3.7 million, or 24 cents a share, a year earlier. Analysts had expected a loss of 49 cents a share, and SolarCity's shares were down more than 9 percent in after-hours trading. For the full year 2012, total revenues were $128.6 million, up from $59.5 million in 2011.
SolarCity said it signed up 30,950 customers in 2012, up from just 9,034 in 2011. The company now has
more than 50,000 customers in 14 states and 287 megawatts of solar power installed.
"We plan to have 250 megawatts deployed in 2013," CEO Lyndon Rive said in a conference call with analysts. "Solar is still less than 1 percent" of electricity generation. "It's a massive growth opportunity."
Founded in 2006, SolarCity is one of the nation's leading installers of rooftop solar panels on homes and commercial businesses, including more than 140 Walmart stores nationwide. It made its name in the solar industry for pioneering the concept of "no-money-down" leasing and arranging third-party financing through leading banks and companies, including Google (GOOG).
The company recently announced a partnership to install solar power on up to 4,700 military residences at the Fort Bliss Army Base in Texas and the White Sands Missile Range in New Mexico. It has operations in 14 states -- including California, Arizona, Colorado and several states in the northeast -- and recently announced a deal where Honda and Acura customers in those 14 states can get a $400 discount off their SolarCity solar system.
Analysts say "downstream" solar companies like SolarCity that focus on installing panels rather than manufacturing them are a bright spot when compared to manufacturers.
Aaron Chew, an analyst with the Maxim Group, notes that traditional metrics like revenue, gross margin and earnings-per-share are hard to apply to SolarCity, which realizes revenue from customers who make monthly leases payments over a 20-year-period.
"The stock is selling off hard, but I think it reflects investors' lack of understanding of the model," said Chew. "From a contract and cash flow perspective, we view the report as in-line."
SolarCity said it installed 157 megawatts in 2012, up from 72 megawatts in 2011, in part because of larger commercial projects. One megawatt is enough to power 750 to 1, 000 homes; but because the sun doesn't shine all the time, solar industry experts say that 1 megawatt of solar can power about 200 households.
On its first day of trading in December, shares of SolarCity closed at $11.79. On Wednesday, they closed at $19.27 but were trading closer to $17.50 after-hours action.
SolarCity co-founders Lyndon and Peter Rive, brothers who serve as the CEO and CTO respectively, are cousins of Tesla Motors (TSLA) CEO Elon Musk. Musk is chairman of SolarCity's board of directors.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.
