Shares of solar manufacturer Maxeon Solar Technologies (MAXN 4.51%) fell as much as 13.7% in trading on Wednesday after the company reported fourth-quarter 2020 results. Shares didn't see much of a bounce off of lows made mid-morning and were still down 13% at 2:45 p.m. EDT.
Fourth-quarter revenue fell 33% to $246 million and the company reported net income of $3.5 million, or $0.11 per share. But there was a $44.4 million gain on stock borrowing facilities that helped the bottom line. Gross margin was an anemic 3% in the quarter.
In the first quarter, management expects revenue of just $160 million and gross margin to be negative. That's a terrible outlook for a company that's supposed to be improving its position as a manufacturer in the solar industry.
Management blamed high raw material costs for the weak financial performance and said the conditions leading to weak margins will continue in the first half of 2021. The good news is that the company has relatively low overhead and a strong balance sheet, which will allow it to invest in more manufacturing capacity. It plans to do just that to serve the U.S. market with more products in coming years, but progress isn't coming fast enough. That's why this solar energy stock is dropping today.