(Reuters) – Solar inverter maker Enphase Energy said on Tuesday it expects inventory levels to normalize and demand for its products to pick up by the end of the second quarter, sending its shares up nearly 13 in extended trading % will increase.
Solar companies have faced rising inventory levels in Europe and declining customer demand in the US due to California’s metering reform and high interest rates. The reform of metering systems has resulted in households with rooftop solar panels receiving less credit for transferring excess power to the grid.
Enphase said sales in Europe fell about 70% sequentially in the fourth quarter as it reduced shipments to manage rising inventory levels at distribution partners.
But the company expects demand and margins for its batteries and microinverters to improve over the course of 2024.
“We have gone through a period of demand slowdown. We believe the first quarter could be the lowest quarter. Europe is already showing the first signs of recovery and we expect non-California states to recover quickly,” said General director Badri Kothandaraman. .
But for the first quarter, resale demand is expected to decline seasonally by about 10%. The company expects first-quarter revenue of between $260 million and $300 million. Analysts on average expected $318.3 million, according to LSEG data.
Enphase’s fourth-quarter revenue was $302.6 million, compared to analyst expectations of $327.9 million.
(Reporting by Mrinalika Roy in Bengaluru; Editing by Shilpi Majumdar)