SolarEdge Technologies, Inc. (NASDAQ: SEDG) shares nosedived in the pre-market trading Friday following the release of preliminary financial results for the third quarter ended September 30, 2023.
The company has lowered its third-quarter revenue projection to $720-$730 million, a significant drop from the initial forecast of $880-$920 million and below the market consensus estimate of $909.02 million.
The GAAP gross margin is expected to range from 19% to 20%, while the non-GAAP gross margin is forecasted to be 20.1% to 21.1%, down from the initial expectation of 28% to 31%.
SolarEdge Technologies (NASDAQ: SEDG) also announced a grim outlook for its operating results, with a GAAP operating loss estimated to range between $9-$28 million. Non-GAAP operating income is expected to be within $12 million to $31 million, a significant drop from the previous forecast of $115 million to $135 million.
CEO Zvi Lando pointed to the second part of the third quarter as the source of their woes, attributing unexpected cancellations and pushouts of existing backlog from European distributors to higher-than-expected inventory and slower-than-expected installation rates.
Management foresees a grim outlook for Q4, expecting further revenue declines as the inventory destocking process continues.
This news has cast a dark cloud over SolarEdge Technologies and even rippled to affect Enphase Energy (NASDAQ: ENPH) shares. SolarEdge Technologies stock has plummeted by 23.50% to $87.20, while Enphase Energy (ENPH) is trading at $100.06, down 13.67% from the previous trading session.
SolarEdge Technologies, Inc. is scheduled to host a conference call to further discuss its results for the third quarter on Wednesday, November 1, 2023, at 4:30 p.m. ET.