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Why SunEdison Is Falling After Earnings

SunEdison Inc. (NYSE: SUNE) reported its second-quarter financial results before the markets opened Thursday. The company had a net loss of $0.93 per share and $455 million in revenue. That compared to Thomson Reuters consensus estimates of a net loss of $0.55 per share on revenue of $393.71 million. In the same period of the previous year, the company posted EPS of $0.12 and $557.50 million in revenue.

The company issued guidance for both the third quarter and the 2015 full year. SunEdison expects 540 to 600 megawatts (MW) for the third quarter and 2,100 to 2,300 MW for the full year. The consensus estimates call for a net loss of $0.51 per share on $418.10 million in revenue for the third quarter, and a net loss of $3.09 per share on $1.56 billion in revenue for the full year.

At the beginning of July, SunEdison disposed of 10.6 million shares of SunEdison Semiconductor in connection with an underwritten public offering of 15.9 million ordinary shares at a price to the public of $18.25 per share. The company received net proceeds from the disposal of $186 million.

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A few operational highlights from the report:

  • 1.9 GW of projects under construction, up 1.1 GW quarter over quarter
  • 8.1 GW pipeline, 5.6 GW backlog, 1.0 GW of gross pipeline additions
  • 4.2 to 4.5 GW 2016 guidance initiated, up 50% from prior outlook

Ahmad Chatila, SunEdison CEO and TerraForm Power chairman, commented on earnings:

During the second quarter, we continued to balance operational execution while meeting our strategic objectives. On the operations front, our leading organic development engine continues to execute as we exceeded our megawatt (MW) and Retained Cash Available for Distribution (CAFD) guidance, delivering 404 MW and $63 million, respectively. In addition, TerraForm Power delivered $65 million of CAFD and continues to create value for shareholders with its leading DPS growth. Finally, we have largely completed our platform transformation with the agreement to acquire Vivint Solar, a leader in residential solar, as well as the IPO of our Emerging Markets-focused asset ownership platform, TerraForm Global.

At the end of the second quarter, the company had cash and cash equivalents of $1.29 billion, compared to $856 million at the end of December 2014.

Shares of SunEdison were down 20.8% at $18.11 late Thursday morning. The stock has a consensus analyst price target of $36.42 and a 52-week trading range of $13.09 to $33.45.

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By Chris Lange