trending Market Intelligence /marketintelligence/en/news-insights/trending/0mxvizxoau4kt0qtm7texa2 content esgSubNav
In This List

Back in the black, Enphase 'inadvertently affected' by Trump tariffs

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


Back in the black, Enphase 'inadvertently affected' by Trump tariffs

After posting its first quarterly profit in two years, solar microinverter specialist Enphase Energy Inc. plans to make it a habit.

"We've said, I think pretty consistently, that we believe 2018 will be a year where we get sustainability profitable," CFO Humberto Garcia told analysts on a Feb. 27 conference call discussing the company's fourth-quarter 2017 and full-year earnings.

Enphase's adjusted net income of 1 cent per share marked its return to profit after eight straight quarters of losses, according to S&P Global Market Intelligence data. The Petaluma, Calif.-based company's last quarterly profit was in the third quarter of 2015, when it reported adjusted EPS of 8 cents.

"This return to profitability represents a significant milestone for the company," said CEO Badri Kothandaraman, the company's former COO, who took the reins in September just as Enphase regained compliance with the Nasdaq's listing requirements.

The 2017 fourth-quarter non-GAAP result, which beat S&P Capital IQ's consensus of a 1-cent-per-share loss, was a turnaround from a loss of 15 cents per share in the fourth quarter of 2016. For the full year, Enphase absorbed a non-GAAP loss of 25 cents per share, beating analysts averaged estimates by 2 cents and down from a $1.04 adjusted operating loss in 2016.

Enphase improved its earnings in 2017 as its revenues dropped to $286.2 million on the shipment of 837 MW of microinverters, down from $322.6 million in 2016. Fourth-quarter revenues fell to $79.7 million from $90.6 million a year earlier.

On a GAAP basis, the company reported a loss of 3 cents per share and a net income loss of $2.9 million, down from a loss of 21 cents per share and a net income loss of $13.2 million a year before.

Tariff exemption sought

Despite Enphase's improved profit outlook and cash position, after raising $20 million in February, President Donald Trump's decision in January to impose trade tariffs on imported solar cells and modules "has created some headwinds" for the company's so-called AC modules, which feature panel-integrated microinverters, Kothandaraman said. "The tariff inadvertently affects [AC modules], while the intention of the tariff was only for cells and modules."

The company, which is seeking an exclusion for the microinverter portion of AC module imports, is partnering with Panasonic Corp. to further develop the integrated product, the companies announced Feb. 12. Enphase has additional AC module partnerships with several European and Asian panel makers. It does not disclose how much of its business is related to AC modules.

Overall, however, Enphase is "not seeing much impact" from the tariffs on the U.S. market, which accounts for roughly 70% of its business, CFO Garcia said. The company, nevertheless, plans to ramp up sales abroad, especially in India, Germany and Austria.