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Enphase Energy sees revenue below estimates on weak U.S. demand, shares fall

Miniatures of solar panel and electric pole are seen in front of Enphase logo in this illustration taken January 17, 2023. REUTERS/Dado Ruvic/Illustration July 26 (Reuters) - Solar inverter maker

Miniatures of solar panel and electric pole are seen in front of Enphase logo in this illustration taken January 17, 2023. REUTERS/Dado Ruvic/Illustration

July 26 (Reuters) - Solar inverter maker Enphase Energy (ENPH.O) forecast third-quarter revenue below Wall Street estimates on weak demand in the United States, sending its shares down 13.4% in extended trading on Thursday.

U.S. demand growth has been tepid as cheaper electricity prices in states like Texas and Arizona make the economics of residential solar less attractive.

Enphase expects revenue between $550 million and $600 million for the quarter ending Sept. 30, compared with analysts' average estimate of $746.5 million, according to Refinitiv.

Its second-quarter revenue fell 2.1% sequentially to $711.1 million, with a 12% drop in the U.S. market partly cushioned by a 25% increase in Europe.

"U.S. accounts about 70% of its revenue and if the U.S. market is experiencing a slowdown, it's difficult for Europe, which is doing much better, to fully compensate," said Raymond James analyst Pavel Molchanov.

Europe is emerging as a major market for solar firms as it looks to reduce its dependence on the Russian fuel supply chain and accelerate its transition to clean energy, boosting business for companies like Enphase and SolarEdge Technologies (SEDG.O).

In the U.S., the solar market has also taken a hit from the Federal Reserve's aggressive tightening that has increased borrowing costs for consumers.

A new metering reform in California that has reduced the money credited to rooftop solar owners for sending excess power into the grid has also hurt the market.

The coastal state accounts for nearly a third of the U.S. residential solar market.

Enphase reported an adjusted profit of $1.47 per share for the quarter ended June 30, beating estimates of $1.25.

Our Standards: The Thomson Reuters Trust Principles.