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8point3 Energy (CAFD) Q3 Earnings Miss, Lifts 2016 View


8point3 Energy Partners LP CAFD reported earnings of 38 cents per share in the third quarter of fiscal 2016 (ended Aug31, 2016), missing the Zacks Consensus Estimate of 42 cents by 9.5%. The partnership reported net income of $15.9 million in the quarter, compared with $1.3 million in the year-ago period.


8point3 Energy, a limited partnership formed by two major solar companies – First Solar Inc. FSLR and SunPower Corp. SPWR, generated revenues of $26.1 million in the fiscal third quarter, up a massive 749% year over year. The reported number was also ahead of the Zacks Consensus Estimate of $22 million by 18.6%.

Cash Distribution & Cash Available for Distribution

The partnership has recently declared fiscal third-quarter distribution of 24.06 cents per unit. This marks an increase of 3.5% over the fiscal second-quarter level.

The partnership has projected fiscal fourth-quarter distribution of approximately 24.90 cents per unit, reflecting another 3.5% sequential hike.

8point3 Energy generated of $24.1 million of cash available for distribution in the fiscal third quarter.

Operational Highlights

In the fiscal third quarter, 8point3 Energy’s total operating costs and expenses increased to $10.6 million from $3.8 million in the year-ago quarter.

Higher cost of operations, depreciation, amortization, and accretion expenses, along with acquisition-related costs led to the upside. Cost of operations was $1.9 million, up from $0.1 million a year ago. Depreciation, amortization and accretion expenses were $6.3 million, up from $1.2 million a year ago.

8POINT3 ENERGY Price, Consensus and EPS Surprise

8POINT3 ENERGY Price, Consensus and EPS Surprise | 8POINT3 ENERGY Quote

Financial Update

8point3 Energy’s cash and cash equivalents as of Aug 31, 2016 were $29.9 million. It has $101 million available on its five-year revolving credit facility.

As of Aug 31, 2016, long-term debt and financing obligations were $362.7 million, compared with $297.2 million as of Nov 30, 2015.

Other Highlights

8point3 Energy’s portfolio consisted of 530 MW of solar generating assets as of Aug 2016 end. The partnership.announced that it has entered into an agreement to acquire a 49% interest in SunPower Corp.'s 102 MW Henrietta solar project for $134 million. This acquisition will enable 8point3 Energy to hold an interest in 637 MW of solar projects.


The partnership expects fourth-quarter fiscal 2016 revenues of $13.5 million to $14.5 million, net loss of $1 million to breakeven results, adjusted EBITDA of $17 million to $18 million, and $22 million to $24 millionin cash available for distribution.

For fiscal 2016, it expects to revenues of $60.2–$61.3 million(prior expectation: $57.1–$59.1 million), net income of $7.7–$8.7 million (prior expectation: $1.8–$3.8 million), adjusted EBITDA of $75–$76 million (prior expectation: $68.8–$70.8 million), and $74.8–$76.8 millionin cash available for distribution (prior expectation: $71.0–$73.5 million).

Zacks Rank& a Stock to Consider

8point3 Energy currently carries a Zacks Rank #3 (Hold). Investors interested in the solar industry may consider Vivint Solar, Inc. VSLR, which carriesa Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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