What happened
Shares of solar energy stock FTC Solar (FTCI 2.68%) fell as much as 21.1% in trading on Wednesday after reporting third-quarter 2021 financial results. Shares recovered slightly late in the day and closed down 12.4%.
So what
Revenue fell 11.2% to $53.0 million, and net loss was up nearly 10 times to $22.9 million, or $0.24 per share. Analysts were expecting $59.0 million in revenue and a loss of $0.19 per share.
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On the positive side, FTC Solar is winning contracts. Management says contracted and awarded order growth is up 580% so far this year with another $267 million added since August.
Now what
Higher input costs for shipping and materials like steel are certainly headwinds for FTC Solar. But it's good news that the company has added $752 million in future orders so far this year. So there should be growth ahead.
What's concerning for a company like this is that it can't make money in a strong solar environment. Until we see a clear trend toward profitability, investors should tread wisely into solar tracking. This is ultimately a commodity business, and companies will have to win with scale and low costs, which FTC Solar hasn't proven it has yet.
