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(Reuters) -Enphase Energy Inc reported market-beating profit in the first quarter on strong sales in Europe, but forecast second-quarter revenue below Wall Street expectations, sending its shares down as much as 17% in extended trading on Tuesday.
The company expects second-quarter revenue between $700 million and $750 million, below analysts’ estimate of $773 million, according to Refinitiv data.
Pavel Molchanov, an analyst at Raymond James, sees net metering reform in California creating headwinds in the second quarter for Enphase, but said that “the company is doing extremely well in Europe”, with the two factors “essentially cancelling each other out.”
The new policy changes the so-called “net metering”, a decades-old policy, which allows homeowners with solar panels to sell the excess power to their utility at or near the full retail rate.
U.S. imports of solar panels have picked up lately after months of gridlock stemming from implementation of a new law banning goods made with forced labor, Reuters reported in March.
During the first quarter, IQ8 Microinverters, used to convert solar power into usable AC power, constituted about 65% of all of Enphase’s microinverter shipments.
It shipped 4.8 million microinverters, up 71% from the same quarter last year. Battery shipments of 102.4 megawatt hours during the quarter, however, fell 16% from last year.
The Fremont California-based company said its earnings stood at $1.37 per share, beating average analysts’ estimate of $1.20 per share.
Revenue rose 65% to $726 million, primarily due to higher sales in Europe. Enphase in February had expected first-quarter revenue in the range of $700 million to $740 million.
Raymond James’ Molchanov sees revenue growing in the second half of the year with the second quarter remaining flat.
The company in March said shipments of its microinverters from Romania are expected to begin in the second quarter of this year.
