Enphase Energy
was the best performing stock in the
S&P 500
on Tuesday, one day after the maker of micro inverter systems for solar panels announced job cuts.
Enphase
said in a filing with the Securities and Exchange Commission on Monday that it has implemented a restructuring plan to cut operating costs. This plan includes a reduction of its workforce by about 10% and the ceasing of operations at its contract manufacturing plants in Wisconsin and Timisoara, Romania.
“I am writing to share details about difficult changes that we are making in our company to address the challenging macroeconomic environment while continuing to invest in our strategic priorities,” Chief Executive Badri Kothandaraman said in a letter to employees.
“Over the last few months, we have made significant efforts to reduce our operating costs, but we have more work to do to right-size our operations and become leaner and more efficient,” Kothandaraman added.
Enphase expects to incur between $16 million and $18 million in restructuring costs, and about $15 million of the charges are expected to be felt in the fourth quarter of 2023.
One day after this announcement, shares of Enphase were rising 8.3% to $134.32 and were on pace to hit their highest close since Aug. 15. The
S&P 500
was up 0.5%. Enphase stock has dropped 49% this year.
The decision to cut additional costs comes after a challenging year for the solar industry. Interest rates have made financing home improvement projects, such as installing solar panels, more expensive, which has hit customer demand. On top of the demand issue, California implemented regulatory changes that affected customer incentives to install solar panels.
Kothandaraman said in the letter to employees that these challenges have caused the company’s top line revenue to decline. Along with the company’s third-quarter financial results in October, Enphase provided a sales outlook that was significantly below Wall Street’s expectations.
Write to Angela Palumbo at [email protected]
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