Sunrun experienced a surge in stock prices on Thursday after reporting an unexpected profit for the country's largest residential solar developer. However, this positive news does not necessarily signal smooth sailing for the solar sector.
Solar stocks have been facing a tough earnings season, with SolarEdge Technologies being the latest company to provide disappointing guidance. As a result, SolarEdge's stock plummeted by 18%, recording its worst day in nearly a year. Enphase Energy and SunPower Corp also issued warnings about weakening demand last week.
Despite this overall negative trend, Sunrun's earnings provided some relief for investors. The stock saw a 7% rally in premarket trading. However, the shares are still slightly below their Tuesday levels, following the sector-wide decline triggered by SolarEdge's earnings.
Notably, Sunrun did not issue any warnings about declining demand in its report.
During the second quarter, Sunrun reported a surprising profit of $55.5 million, equivalent to 25 cents per share. This exceeded analysts' expectations of an adjusted loss of 24 cents per share, according to FactSet. Despite this positive outcome, total revenue only experienced a modest 1% increase to $590 million, falling short of analysts' estimates of $628 million.
After the recent challenges faced by solar stocks, Sunrun's earnings can be considered good news. However, it is important to note that this development is unlikely to have a significant impact on the broader solar sector.
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