SolarEdge posts strong revenue increase, slight drop in net profit
Aug 7, 2019 12:05 PM ET
- The Israeli inverter manufacturer saw its net profit decline 4% year-on-year to $33.1 million in the second quarter, despite shipping 1.3 GW and seeing a 43% increase in turnover. Gross margins were affected by the increase in U.S. tariffs on China made products.
Despite the recent increase of Section 301 tariffs in the United States, Israel-based inverter maker SolarEdge has provided, once again, solid financial results for the second quarter and first half of this year.
With inverter shipments totaling 1.3 GW, the company reported revenue of $325.0 million for the period from April to June, up 43% from the same period in 2018 and 20% from the prior quarter. Quarterly revenue for the solar business was even stronger, rising from $227.1 million to $306.7 million, up 35% year-on-year and 21% from the prior quarter.
Gross margin, however, increased from 31.7% in the first quarter to 34.1% in the latest quarter and dropped by 2% from the second quarter of last year. “This quarter’s gross margins were negatively impacted by the increase in U.S. tariffs on China made products,” the company said.
Operating profit also grew 12% year-on-year from $40.7 million $45.4 million, while net profit dropped 4% from $34.6 million to $33.1 million.
“Despite the effect of increased tariffs on certain Chinese made products, our non-GAAP solar business gross margin was strong, at approximately 37%, slightly higher than the same quarter last year,” the company said. SolarEdge, which also produces a portion of its devices in China, is currently planning to open a new manufacturing site in Vietnam to make both power optimizers and inverters for the U.S. market, thus avoiding tariffs imposed by the Trump administration on Chinese goods.
The company recently expanded its business through the acquisition of Italian EV systems manufacturer SMRE, after buying South Korean battery maker Kokam and UPS supplier Gamatronic. “The integration of the acquired non-solar businesses is proceeding on schedule and we expect growth in each new line of business in the upcoming quarters,” said Solaredge CEO, Guy Sella.
As for the first half of the year, the company said revenue grew from $436.9 million to $596.8 million, but net profit fell from $70.2 million to $50.2 million.
Looking forward, SolarEdge said it expects revenue of $395 million to $410 million for the current quarter, with gross margins being in the range of 32% to 34%. Guidance for full fiscal year was not provided.
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