US residential solar company Sunrun confirmed itself as the country’s leading solar installer in the second quarter by installing a total of 91 megawatts (MW) worth of new capacity, its best ever quarter, despite also reporting earnings-per-share well under expectations.
Sunrun published its second-quarter earnings late last week, revealing an impressive 91 MW worth of solar deployed in the quarter, up 20% from 76 MW a year ago and up 33% on the first quarter. Creation cost per watt was $3.22, down on the $3.37 reported a year ago. The strong quarterly deployments came on the back of a lackluster first quarter which saw only 68 MW installed.
“We continue to gain share, installing a record amount of solar energy and home batteries this quarter, driven by over 40% growth in our direct business,” said Lynn Jurich, Sunrun’s chief executive officer. “We have now delivered clean, resilient and affordable energy to more than 202,000 customers. Given our market leadership position and enormous opportunity for growth, we are investing heavily to strengthen our competitive advantages in customer acquisition and experience.”
However, while Sunrun boasted a strong quarter in terms of solar deployment, it was not able to back this up on the financial side of things. While total revenue grew to $170.5 million in the second quarter, up 31%, or $39.9 million from the same quarter a year earlier, it’s net income attributable to shareholders was only $7.4 million, down on the $18.3 million a year earlier. Thus, earnings per share were down to only $0.06 per share — compared to $0.25 per share in the previous quarter and $0.23 per share a year earlier.
Similarly disappointing was what some believe to be lackluster guidance for the third quarter — deployments in the area of 100 MW and yearly deployment growth of 15%. Bank of America Merrill Lynch (BofA Merrill) analyst Julien Domoulin-Smith described 15% as “the minimum required for the stock to see any upside.”
As such, and unsurprisingly, the company’s stock fell by as much as 17% on the back of the news and has since stabilized at 8% down on its previous trading average. However, it’s worth noting that BofA Merrill has upgraded Sunrun from “Underperform” to “Neutral” with a price target up from $15 to $16, saying that the response to mixed Q2 results and disappointing Q3 guidance was an overreaction on the part of the market.