8point3 Energy (CAFD) Q3 Earnings Lag Estimates, Revenues Up

8point3 Energy Partners LP (NASDAQ:CAFD) reported earnings of 27 cents per share in third-quarter fiscal 2017 (ended Aug 31), missing the Zacks Consensus Estimate of 65 cents by 58.5%.

The bottom line also declined 40.7% from 38 cents in the year-ago period.

Revenues

8point3 Energy, a limited partnership formed by two major solar companies — First Solar Inc. (NASDAQ:FSLR) and SunPower Corp. (NASDAQ:SPWR) — generated revenues of $27.7 million in the reported quarter, up 6.2% year over year. The top line also surpassed the Zacks Consensus Estimate of $26 million by 6.5%.

Cash Distribution & Cash Available for Distribution

The partnership recently declared a distribution of 27.21 cents per unit in the fiscal third quarter. This marks an increase of 3% over the previous quarter level.

Additionally, it projects distribution of approximately 28.02 cents per unit for fourth-quarter fiscal 2017, reflecting another 3% hike sequentially.

8point3 Energy also generated $33.2 million of cash available for distribution in the reported quarter.

Operational Highlights

In the quarter under review, 8point3 Energy’s total operating costs and expenses increased 7.5% to $11.4 million from $10.6 million in the year-ago quarter.

Higher cost of operations, depreciation and accretion expenses along with selling, general and administrative costs led to an increase in expenditure.

Evidently, cost of operations was $2.1 million, up from $1.9 million a year ago. Depreciation and accretion expenses were $7.2 million, up from $6.3 million in the previous year. Selling, general and administrative expenses were $2.1 million, up from $1.8 million in the year ago period.

Financial Update

8point3 Energy’s cash and cash equivalents as of Aug 31were $10.4 million compared with $14.3 million as of Nov 30, 2016.

As of Aug 31, long-term debt and financing obligations was $710 million compared with $384.4 million as of Nov 30, 2016.

Other Highlights

8point3 Energy’s portfolio consisted of 945 MW of the U.S. solar generating assets as of May 2017 end. The partnership continues to deliver solid performance and is expected to generate annual CAFD of approximately $100 million in the current year.

Guidance

For fiscal fourth quarter, the partnership projects revenues in the range of $12.0−$15.0 million, net income in the band of $1.5−$4.0 million, adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $22.0−$25.0 million and cash of $32.0−$35.0 million available for distribution.

For fiscal 2017, 8point3 Energy raised its expectation of revenues in the range of $66.5–$69.5 million, up from $63.3–$66.7 million, guided earlier. Net income of $32.0–$34.5 million compared with previous guidance of $27.0–$32.6 million. Adjusted EBITDA of $117.0–$120.0 million, up from $106.5–$113.1 million and cash of $106.0–$109.0 million available for distribution, up from $91.5–$101.0 million, projected earlier.

Upcoming Peer Release

ReneSola Ltd. (NYSE:SOL) is expected to report its third-quarter 2017 earnings results on Dec 5.

Zacks Rank

8point3 Energy carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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