SolarEdgeTechnologies, the renewable energy company, plummeted over 23% in US pre-market trading on Friday after it revealed profits and gross margins would be lower than previously expected in the third quarter.
Citing a slowdown of solar power installations in Europe, the Israeli technology firm also predicted a “significantly lower” level of sales during the fourth quarter, reports revealed.
Revenues for the third quarter are now predicted to come in between US$720 million and US$730 million, down from previous guidance of US$880 million to US$920 million.
Gross margins had previously been forecast to reach as high as 31%, but following the update this has been scaled back to between 20.1% and 21.1%.
Operating income could slump as low as US$12 million following the update, having previously been guided between US$115 million and US$135 million.
“During the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and pushouts of existing backlog from our European distributors,” SolarEdge chief executive Zvi Lando said.
Confirming the slowdown was not a result of the Hamas/Israel conflict, the solar power technology manufacturer added it had overstocked before facing a drop in installation rates.
“[Installation rates] were much slower at the end of the summer and in September, where traditionally there is a rise in installation rates. The adjusted guidance is unrelated to the tragic events that have unfolded in Israel,” the company said.
Several other solar-based stocks have also fallen following the news including Enphase Energy, down 13%, and SunPower, dropping 7%.