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SolarCity Torched On Q1 Guidance As Losses Expected To Deepen

SolarCity ( SCTY ) stock was torched after hours Tuesday, after the No. 1 residential installer guided to deepening Q1 losses and slower installation growth in 2016, despite CEO Lyndon Rive’s earlier pledge to curb losses by 2017. SolarCity stock was down more than 30% after the close, after the company released its Q4 earnings and gave guidance, and after falling 5.7% in Tuesday’s regular session. Shares of rival installer  Sunrun ( RUN ) also wrapped Tuesday’s regular session down 7% and were down another 6% after hours. Big solar companies  SunPower ( SPWR ) and First Solar ( FSLR ) were down 6% and more than 2%, respectively, after hours. For Q4, SolarCity reported $115.5 million in sales, up 61% year over year, and a per-share loss ex items of $2.37, widening from a $1.33 per-share loss in the year-earlier quarter. Both measures beat Wall Street expectations for $105.6 million and $2.59, as well as SolarCity’s three-months-ago outlook for $100 million to $108 million and $2.60 to $2.75 losses. During Q4, SolarCity installed 272 megawatts, which was up 54% vs. the year-earlier quarter but missed the company’s earlier guidance for 280 MW to 300 MW. SolarCity ended the year with $399.6 million in sales, $7.91 losses per share minus items and 870 MW installed. The consensus of 18 analysts polled by Thompson Reuters saw $389.7 million and $8.03. Installations for the year came in below prior guidance for 878 MW to 898 MW, up 73% from 2014. Current-quarter guidance for $2.55 to $2.65 losses per share ex items would deepen from $2.36 in the year-earlier quarter and would miss analyst expectations for $2.36. SolarCity didn’t offer a Q1 sales view. The consensus modeled $113 million, which would be up 57%. Shortening Cash Conversion Cycle SolarCity’s Q1 180 MW installation guide would be up 18% year over year. For the year, it expects installations of 1.25 gigawatts, up 44%, as the extended Investment Tax Credit (ITC) on solar provides more growth tailwinds. The ITC extension will lead to “good growth in 2017 and beyond,” Rive told analysts during the company’s earnings conference call late Tuessday. But SolarCity shifted its focus in Q3 to becoming cash flow positive, sacrificing its typical 80% annual installation growth rate. Rive reiterated SolarCity’s 40% growth target for 2016 despite the low 18% growth forecast for Q1. Part of that process is shortening SolarCity’s cash conversion cycle, Rive told analysts. As a result, commercial installations will be back-end loaded. “While the ultimate result will be shorter time from the start of construction to operation and thus higher cash generation, the initial impact is lower installations in the first period implemented,” according to SolarCity’s letter to shareholders. Nevada Policies Nick Q1 Installations Nevada’s decision to slash net-metering payments to solar customers also impacted Q4 installations and Q1 guidance, Rive said. During Q4, Nevada contributed 23 MW in installations and typically accounts for 20 MW per quarter. By year’s end, Rive expects Nevadans to overturn the Public Utility Commission’s late-December decision. “Homeowners in Nevada want solar, they want the freedom to choose where their energy comes from, and I think this is going to be overturned by the public, by ballot referendum by the end of the year,” he said. Solar has thrived on other policy fronts. As the Nevada battle waged, California regulators opted to continue paying solar customers for energy fed back into the grid. And in December, more than 190 countries pledged to curb carbon emissions during a climate change summit in Paris. “The majority of this (climate change agreement) is going to be on renewable energy, which is going to be solar,” Rive told analysts. Tesla Motors ( TSLA ) CEO Elon Musk is SolarCity’s chairman. Tesla is due to report earnings late Wednesday. Tesla stock rallied to close up 0.2% after falling intraday to a two-year low.  

Why Facebook, Google, Amazon Are Best Positioned For Mobile

Loading the player… With the proliferation of smartphones has come the abundance of smartphone apps. A new report from Mizuho Securities says that Facebook ( FB ), Alphabet ( GOOGL )-owned Google and Amazon ( AMZN ) are in the best mobile positions. Among Android apps, Mizuho says that Facebook continues to lead in terms of usage, with its family of apps dominating in nearly every major continent. Following the Facebook app in usage are Google’s Chrome browser, Google Search and YouTube. And the analyst also notes that Amazon is gaining share in mobile app installations. Facebook dropped below the key 50-day line in big volume Monday as the market sold off. Shares rallied off session lows Tuesday and briefly turned higher, but closed down 0.2%. Alphabet breached its 50-day line last week. Shares reversed off of a three-and-a-half month low on Monday. After an up and down session, Alphabet stock dipped 0.45% Tuesday on higher volume. Amazon lost support at the critical 200-day line last week and is now below the 500 price level. The stock is hitting its lowest level in five and a half months in fast turnover, closing down 1.2% Tuesday. Meanwhile, the other FANG (Facebook, Amazon, Netflix, Google) stock, Netflix ( NFLX ), rose 3.4%, gaining for a second session in heavy volume. Netflix shares broke below the 200-day line last month. Image provided by Shutterstock .

Yelp Advised To Stop ‘Spending Like It’s 2014’

Yelp ( YELP ) stock got at least four price-target cuts Tuesday after the troubled social media site late Monday gave weak Q1 guidance, lowered its 2016 earnings outlook and surprised Wall Street by announcing that its CFO was leaving the company. Yelp stock was down more than 3% in afternoon trading in the stock market today , near 15. Yelp stock, trading at its lowest price since June 2012, is down 85% from its all-time high of 101.75 brushed in early March 2014. The company late Monday did report Q4 earnings that beat analysts’ revenue and earnings forecasts. “After its Q4 report, we continue to expect slowing user growth, higher advertising spending and rapid sales force hiring. Yelp is spending like it’s 2014,” wrote Pacific Crest Securities analyst Evan Wilson in an industry note late Monday. “We continue to postulate that the environment has changed and it’s time for Yelp to focus on profitability instead of raw growth.” The company announced that its chief financial officer, Rob Krolik, will be stepping down “in the coming months.” Yelp said it will start looking for a new CFO immediately. UBS analyst Eric Sheridan wrote in an industry note that Yelp’s earnings translated to “disappointment today and uncertainty tomorrow.” Sheridan said that “with a lower-than-expected EBITDA (earnings before interest, taxes, depreciation and amortization) guide for fiscal year 2016 and a CFO transition ahead, Yelp’s Q4 results introduced an elevated level of uncertainty around the progress and trajectory of the business.” Sheridan was sour on the company’s Q4 EBITDA miss despite a higher contribution from its higher-margin brand-advertising business. UBS cut its price target on Yelp stock to 17 from 26. Needham & Co. cut its price target on Yelp stock to 25 from 40, while Axiom Securities cut its price target to 18 from 25. Yelp is facing competition in online reviews from multiple fronts — including from Facebook ( FB ), Apple ( AAPL ), Amazon.com ( AMZN ) and Alphabet ( GOOGL )-owned Google — as other websites build or buy their own databases of user-generated reviews to attract viewers. Yelp also competes with online travel agency TripAdvisor ( TRIP ) and Priceline Group ( PCLN ), the world’s largest Web travel-service company. Thomson Reuters noted Yelp’s Q4 EBITDA as coming in light of the consensus analyst estimate: $17.54 million vs. the $21.9 million that analysts had anticipated. Yelp posted Q4 EPS ex items of 11 cents, down 40% year over year. Yelp reported that revenue rose 40% year over year to $153.7 million. That exceeded the $152.35 million that analysts polled by Thomson Reuters had wanted to see.