Stock markets were poised to move slightly lower on Friday morning, as the latest reading on inflation at the wholesale level inched higher after having seen steep declines in recent months. That sent stock index futures down as much as half a percent. Investors have had to weigh whether renewed inflationary pressures would force the Federal Reserve to leave interest rates higher for a longer period of time than initially expected.
Despite fairly modest declines for the market benchmarks, a pair of stocks made much larger moves. Archer Aviation (ACHR 1.00%) jumped on news of a big collaboration to provide more funding for the company's electric vertical takeoff and landing (eVTOL) vehicle aspirations, while Maxeon Solar Technologies (MAXN 17.42%) disappointed investors with its latest quarterly results. Read on to get all the details you need below.
Archer makes a lot of progress
Shares of Archer Aviation were up 17% early Friday. The eVTOL vehicle developer announced several pieces of important news.
Leading the headlines was Archer's having secured a $215 million investment from a consortium of parties, including automaker Stellantis, aerospace giant Boeing, United Airlines, and fund manager Ark Invest. As part of the deal, Boeing and Archer competitor Wisk Aero agreed to settle their litigation with Archer and enter into a collaboration for autonomous flight development.
In addition, Archer's Midnight eVTOL received a special airworthiness certificate from the Federal Aviation Administration. That should allow the company to begin flight testing soon, and Midnight is poised to become the first eVTOL aircraft to get delivered to a customer as part of Archer's contracts with the U.S. Department of Defense. Archer believes that it could enter Midnight into service as early as 2025.
Archer's second-quarter financial results also got released, with no real surprises due to its current lack of revenue and an expected cash-burn rate. Yet with the new funding, Archer is putting itself in position to bridge the gap between development and delivery, and investors are pleased to see the eVTOL specialist's strategic plans getting closer to fruition.
A dark day for Maxeon
Meanwhile, shares of Maxeon Solar Technologies plunged 25% early Friday. The solar company's second-quarter financial results reflected relatively weak conditions in the industry, and despite solid revenue growth, investors seemed concerned about Maxeon's future.
Maxeon's financial numbers looked fairly good on their face. Revenue of $348 million was up by 46% year over year. Shipments jumped by more than 50% to 807 megawatts. On an adjusted pre-tax operating basis, Maxeon reversed a year-ago loss with gains of $30 million.
However, Maxeon warned that the health of the distributed generation market took a big turn for the worse late in the quarter. The company blamed high interest rates for the difficulty, as well as recent changes in renewable energy policy in California and significant levels of inventory across the industry's distribution channels. Residential sales are likely to take a hit not only in the third quarter, but also potentially for the rest of this year and even into 2024.
As a result, Maxeon projected shipments of just 700 to 740 megawatts in the third quarter, with revenue declining to between $280 million and $320 million. Full-year revenue is likely to be between $1.25 billion and $1.35 billion. That guidance is consistent with somewhat uncertain views of other solar energy companies, but investors are having to come to grips with what it means for the rest of 2023 and beyond.