Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of SunEdison (SUNEQ) jumped as much as 13% today after reporting third-quarter earnings.
So what: On a non-GAAP basis, sales fell 5%, to $672 million, and the company made a tiny profit of $4.1 million, or breakeven per share. Analysts were only expecting $562 million in revenue, and a $0.12 per-share loss, so SunEdison leapt over the low bar set by Wall Street.
More importantly, long term, management announced plans to spin some solar assets into a public entity next year. They're expecting about $40-$50 million in cash flow from the transaction, which would expand financing options for solar builders.
Now what: SunEdison is also going to spin off its semiconductor unit next year, focusing instead on the utility scale solar market. Having a public entity to push assets down to would be an attractive option, and it's something that other solar players may use, as well. With other downstream solar companies generating a profit, I'd take a wait-and-see approach on SunEdison. It has a lot of potential in solar, but it's still losing money building projects, which will have to turn around for me to jump into the stock.
