What happened

Shares of solar supplier SolarEdge Technologies Inc (NASDAQ:SEDG) jumped as much as 12% on Wednesday after the company reported earnings. At 12:30 p.m. EDT shares had fallen slightly, but were still up 10.4% on the day.

So what

Revenue fell 8.1% to $115.1 million and net income dropped 31.8% to $14.2 million, or $0.36 per share on a non-GAAP (generally accepted accounting principles) basis. Analysts were only expecting earnings of $0.30 per share and revenue of $114.2 million.

Solar panels shown on a residential rooftop

Image source: Getty Images.

Management said diversifying geographically has helped the business as it expanded into Europe and other parts of the world. And confidence in the current strategy has management guiding for revenue of $120 million to $130 million in the second quarter, and gross margin of 32% to 34%.

Now what

This isn't really a case of investors seeing incredible growth or profits, but rather relief that conditions weren't even worse. SolarEdge's position as a supplier of inverters and other components to the solar industry is subject to constant price pressure and the changing needs of installers. I wouldn't rejoice too much at these results, given the fact that both the top and bottom lines are declining. Performing less poorly than expected isn't exactly a great sign for the long-term stability of a company.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.