LOS ANGELES SolarCity Corp SCTY.O on Wednesday posted a quarterly loss that was steeper than Wall Street expected while revenue fell well below forecasts, and shares of the U.S. solar panel installer slid 8.7 percent.
The company posted a fourth-quarter net loss of $28 million, or $1.10 per share, compared with a profit of $3.7 million, or 24 cents per share, a year ago.
The company's basic loss per share was 54 cents. On that basis, Wall Street analysts, on average, had expected a loss of 44 cents per share, according to Thomson Reuters I/B/E/S.
Total revenue grew 22 percent to $25.3 million from $20.7 million. Analysts had expected revenue of $36.67 million. Total customers rose 192 percent, the San Mateo, California, company said.
Operating expenses in the quarter were $37.9 million, up from $22.3 million in the year earlier quarter.
SolarCity said it has grown rapidly thanks to a business model that allows homeowners to pay a monthly fee for solar panels, eliminating the need for a large upfront investment.
According to the company, this lease model enables it to have a recurring and predictable stream of cash. Lease revenue rose 100 percent during the quarter to $14 million.
The company also benefits from federal incentives that allow solar system owners to receive a tax credit for 30 percent of the cost of the system.
It has also benefited from an expired program that allowed owners to claim a cash grant in lieu of the tax credit. Awards under that program, some of which are still working their way through the system despite its expiration, will be reduced by 8.7 percent due to the federal governments across-the-board spending cuts known as sequestration.
SolarCity Chief Executive Lyndon Rive said the sequester cuts would reduce SolarCity's grants by $3.8 million. The company may need to find new ways to finance some 25 megawatts of projects that qualified for the cash grant program, he said.
In January, SolarCity said it expected 2013 solar system deployments of 250 megawatts. It deployed 157 megawatts in 2012.
SolarCity went public on December 13 after cutting its initial public offering price to attract investors skittish about putting money into the volatile solar industry. Nearly three months later, however, its shares are well over double the IPO price of $8.
SolarCity shares were trading at $17.60 in after-hours trade after closing at $19.27 on the Nasdaq.
(Reporting By Nichola Groom; Editing by Bernard Orr, Leslie Gevirtz, David Gregorio and Leslie Adler)
(This story corrects paragraph 10 to show the company may need to find new ways to finance 25 megawatts of projects, not that it may choose not to deploy them)