Key Takeaways
- Maxeon Solar Technologies reduced its outlook because of a decline in demand for solar products.
- The company indicated higher interest rates, large inventories, and changes in California’s solar rules hurt sales.
- Maxeon said it will focus on corporate and industrial customers as residential demand wanes.
Shares of Maxeon Solar Technologies (MAXN) tumbled more than 30% on Friday after the provider of solar products cut its full-year guidance on falling demand.
The Singapore-based firm now sees 2023 revenue in a range of $1.25 billion to $1.35 billion, down from the previous forecast of $1.4 billion to $1.6 billion. It anticipates adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $80 million to $100 million compared with the earlier outlook of $95 million to $120 million.
CEO Bill Mulligan said the “demand environment in the global distributed generation (DG) market weakened significantly” late in the second quarter. He pointed to higher interest rates, significant channel inventory industry-wide, and the impact of policy disruption in California. That state changed the way homeowners with solar panels are reimbursed for supplying the grid, making installing them less attractive.
Mulligan noted that the company came up short of its targets for volume and revenue in the quarter, and expects “challenging market conditions to persist at least through Q3, especially in residential.” He indicated because of that, its sales team will focus on the commercial and industrial sector.
Shares of Maxeon Solar Technologies traded at their lowest levels since July 2022 following the news.
YCharts
Source: https://www.investopedia.com/maxeon-cuts-its-guidance-as-demand-for-solar-products-weakens-7642428?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo