SolarCity Corp.’s loss swelled in the second quarter as the biggest U.S. rooftop developer seeks approval from shareholders to be acquired by Tesla Motors Inc.
The net loss was $55.5 million, or 56 cents a share, compared with $22.4 million, or 23 cents, a year earlier, the San Mateo, California-based company said in a statement Tuesday. Excluding some items, the loss was $2.32, less than the $2.53 average of 11 analyst’s estimates compiled by Bloomberg. Sales rose to $185.8 million from $102.8 million.
The largest U.S. rooftop solar installer has trimmed its growth forecast after a strategic shift in October to focus on profitability, and its shares have slumped by more than half this year. While billionaire Elon Musk has touted the long-term synergies between Tesla’s electric cars powered by SolarCity systems, some investors have been skeptical about the benefits to Tesla.
SolarCity’s board agreed Aug. 1 to a reduced offer of $2.6 billion in Tesla shares, a little more than a month after Musk made a $2.8 billion unsolicited offer for the company founded by his first cousins. Musk is chairman and the largest shareholder in both companies.
The buyout offer came as SolarCity was grappling with mounting debt and shifting consumer sentiment over solar power. Homeowners increasingly prefer to purchase the rooftop systems rather than the decades-long leases that make up most of the company’s business. SolarCity CEO Lyndon Rive in June made changes to simplify the company’s loan program and receive financing from outside sources rather than accumulating debt on its balance sheet.
SolarCity installed 201 megawatts of panels in the second quarter, beating its 185-megawatt target. However, the company also said Aug. 1 that residential demand has been slower than expected and it reduced its installation forecast for the year to 900 megawatts to 1 gigawatt, down from at least 1 gigawatt.
SolarCity and Tesla have not yet set dates for shareholder votes on the acquisition, which they expect to complete in the fourth quarter.