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Major growth but supply chain problems hit SolarEdge profit

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Israeli solar energy technology company SolarEdge Technologies (Nasdaq: SEDG) beat analysts’ estimates on revenue in the first quarter of this year, but missed on profit. This is a result of opposing factors: on the one hand, demand for the company’s products rose against the background of the energy crisis in Europe, and sales in the US reached record levels; on the other hand, supply chain difficulties eroded gross profit.

SolarEdge provides systems for monitoring and optimizing solar energy production, and energy storage solutions. In late trading in New York, after the quarterly financials were released, the company’s share price rose 2%. SolarEdge has a market cap of $14.14 billion.

First quarter revenue totaled $655 million, representing 61.6% growth over the corresponding quarter of 2021, and $20 million ahead of the consensus analysts’ estimate. On a GAAP basis, net profit was $33.1 million, up 10.1% in comparison with the corresponding quarter.

As mentioned, supply chain difficulties eroded the company’s profitability, raising the cost of components and of shipping for its products. Movements in the euro-dollar exchange rate also had a negative impact on profit. The gross profit margin in the solar segment was 30.2%, which compares with 32.8% in the previous quarter. The overall gross margin was 27.3%, down from 29.1% in the previous quarter and 34.5% in the corresponding quarter of 2021.

On a non-GAAP basis, SolarEdge posted a net profit $68.8 million, up from $55.5 million in the corresponding quarter. Earnings per share were $1.20, $0.07 below the consensus analysts’ estimate.

Cash flow used in operating activities was $163 million, compared with $89.6 million generated from operating activities in the previous quarter and $24.1 million generated from operating activities in the corresponding quarter last year.

At the end of the first quarter, SolarEdge had cash and cash equivalents of $979 million, net of debt, which compares with $548 at the end of 2021.

During the first quarter, SolarEdge raised $650.5 million net in a share offering at $295 per share. Its share price closed at $255.31 yesterday.

For the second quarter, the company forecasts revenue of $710-740 million, which is more than the analysts’ estimate of $687 million. The non-GAAP gross margin is expected to be 26-29%. Revenue from the solar segment is expected to be $660-690 million, with a gross margin of 28-31%.




SolarEdge CEO Zvi Lando said, “”We are pleased with our record revenues for the first quarter which represent 62% growth from the first quarter of last year and which are driven by record revenues in the United States and 14 countries in Europe. We continue to demonstrate our operational capabilities by navigating the current supply chain environment to meet strong worldwide demand for our products, and continuing to build long-term manufacturing capacity to support our growing businesses.”

In the conference call following the release of the quarterly financials, Lando said that the company had had record sales in the Netherlands, Italy, Poland, Spain, Switzerland, and the UK. He said that the first quarter was traditionally the weakest in Europe, but that this year the company had experienced substantial growth in demand – 40% in the domestic sector and 52% in the commercial sector, in comparison with the previous quarter. Given the rise in electricity prices in Europe and government support there, SolarEdge sees continuing strong growth momentum on the continent. He mentioned that in order to meet the demand, the company had had to dispatch some of its products by air freight, and, along with the effects of currency fluctuations, this had put pressure on gross profit margins.

Published by Globes, Israel business news – en.globes.co.il – on May 3, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.


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Novavax Stock Price Drops 5% as BofA Starts at Underperform, Sees 40% Downside Risk By Investing.com

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© Reuters. Novavax (NVAX) Stock Price Drops 5% as BofA Starts at Underperform, Sees 40% Downside Risk

By Senad Karaahmetovic

Bank of America analyst Alec Stranahan initiated research coverage on Novavax (NASDAQ:) with an Underperform rating and a $35.00 per share price target, signaling a downside risk of 40% based on yesterday’s closing price of $58.43.

Novavax stock price is down over 60% YTD, fueled by tempered expectations in COVID-19 and seasonal flu, as well as tightening financial conditions. Despite such a big drop in NVAX shares, the analyst sees “room for shares to trade lower still.”

His stance is based on “our longer-term Nuvaxovid expectations [that are] meaningfully below consensus (~$1.2B in 2024+; -$800M consensus) given our bearish view on continued C-19 booster use, unclear benefit as a heterologous option, and waning immunity against new variants (i.e., Omicron). Resolution on approvability in flu, RSV, and malaria are also still open questions, with these markets becoming increasingly crowded and emerging competitor data looking strong relative to what Novavax has shown,” Stranahan told clients.

The analyst added that he could be wrong in case of a greater initial uptake in the US and the rest of the world when it comes to C-19 sales, or sustained long-term use. Moreover, the full approval of NanoFlu could “add another $15 to our PO.”

Novavax stock price is down 5.6% today.

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Ethereum co-founder Vitalik Buterin says the blockchain’s highly anticipated ‘merge’ will happen in August

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“If there are no problems, then the merge will happen in August,” Vitalik Buterin said at the ETH Shanghai Web 3.0 Developer Summit on Thursday. Read More

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Emergency savings take a hit as households adjust their finances amid high inflation, study shows

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Jim Watson | AFP | Getty Images

It appears emergency savings are another casualty of high inflation.

About one-third of adults are contributing less to their emergency funds so that they’re able to cover their everyday expenses, according to research from New York Life Insurance Company. The average reduction in monthly contributions to those emergency accounts is $243, with millennials making the biggest cut: $289.

“While it is concerning that the increased costs of everyday goods and regular expenses may deflate a necessary financial cushion, this environment means households are making calculated decisions about how to adjust their financial strategy in the way that makes the most sense for them,” said Dylan Huang, head of Retirement & Wealth Management Solutions for New York Life.

Inflation is running at 8.3% year-over-year, according to the most recent measurement from the U.S. Bureau of Labor Statistics. Although that’s down slightly from the March peak of 8.5%, it is still the fastest annual pace in about four decades and far above the Federal Reserve’s target of 2%

The Fed already has raised a key interest rate two times this year in an effort to slow the pace of inflation and is expected to continue notching hikes this year. The idea is that as the cost of borrowing rises, consumers will rein in their spending and the resulting lower demand for goods and services will slow price increases.

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Beyond reduced emergency savings contributions, inflation also is causing households to delay some financial goals: putting off vacations (33%), paying off credit card debt (22%), buying a car (22%) and buying a home (16%), according to the New York Life research.

At the same time, long-term savings is being less impacted: 72% of those surveyed said they still expect to retire at their desired age.

“Among those not yet retired, we’re seeing this group making necessary adjustments to their financial strategies while not allowing short-term anxiety to derail their plans for retirement,” Huang said.

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