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8point3 Energy (CAFD) Q1 Earnings Impress, Revenues Beat

8point3 Energy Partners LP CAFD, which began trading on Jun 19, 2015, reported earnings of 27 cents per share in the first quarter of fiscal 2016 (ending Feb 29, 2016), while the Zacks Consensus Estimate was a loss of 13 cents per share. The partnership swung into profit with a net income of $5.3 million in the reported quarter from a net loss incurred in the year-ago period.

Revenues

8point3 Energy, a limited partnership formed by two major solar companies, First Solar Inc. FSLR and SunPower Corp. SPWR, generated revenues of $7.1 million in the fiscal first quarter, up 232.8% year over year. The reported number was also ahead of the Zacks Consensus Estimate of $6.9 million.

Cash Distribution & Cash Available for Distribution

The partnership had earlier declared a first-quarter distribution of 22.46 cents per share. This is an increase of 3.5% over the fourth quarter. The distribution will be paid on Apr 14, 2016.

The partnership has projected a fiscal second quarter distribution of approximately 23.2 cents per share, an increase of 3.5% over the sequentially preceding quarter.

The partnership generated cash available for distribution of $18.3 million in the fiscal first quarter.

Operational Highlights

In the first quarter, 8point3 Energy’s total operating costs and expenses surged to $8.3 million from $6.3 million in the year-ago quarter.

Higher selling, depreciation, amortization and accretion expenses led to the increase. Selling, depreciation, amortization and accretion expenses were $4.3 million, up from $0.7 million a year ago.

Financial Update

8point3 Energy’s cash and cash equivalents as of Feb 29, 2016, came in at $64.9 million. It has $151 million available on its five-year revolving credit facility and $25 million available through a delayed draw on its debt facility. With this, 8point3 Energy had total liquidity of over $240 million as of Feb 29, 2016.

As of Feb 29, 2016, long-term debt and financing obligations were $297.4 million compared with $297.2 million as of Nov 30, 2015.

Project Highlights

8point3 Energy‘s entire portfolio of 432 MW is producing energy.

Recently, the partnership acquired the 20 MW Kern County School District project, which it expects will generate approximately $3.3 million in annual after-tax Cash Available for Distribution when all three phases turn operational later this year. The project has a 20-year remaining contract term.

The partnership has also agreed to acquire a share in First Solar's 40 MW Kingbird project as well as an interest in SunPower's operating 50 MW Hooper project.  These two new projects are likely to generate about $9 million in combined annual pre-tax CAFD and have 20-year contract terms. Upon completion, these will bring total generation assets to more than 542 MW.

Guidance

The partnership expects second quarter fiscal 2016 revenues to be between $11 million and $12 million, net loss of $2 million to $0.5 million, adjusted EBITDA of $16 million and Cash Available for Distribution of $6 million to $7.5 million.

The partnership also reiterated its targeted distribution growth rate of 12–15% for 2016.

Zacks Rank

8point3 Energy currently carries a Zacks Rank #3 (Hold). Investors interested in the solar industry may consider ReneSola Ltd. SOL, currently sporting a Zacks Rank #1 (Strong Buy).

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FIRST SOLAR INC (FSLR): Free Stock Analysis Report
 
RENESOLA LT-ADR (SOL): Free Stock Analysis Report
 
SUNPOWER CORP-A (SPWR): Free Stock Analysis Report
 
8POINT3 ENERGY (CAFD): Free Stock Analysis Report
 
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