SolarCity's Slippery Slope; Poor Earnings Await At The End?

SolarCity Corp SCTY shares were down more than 3 percent on Tuesday. The company is scheduled to report earnings after the bell. A look at Estimize provides a pretty clear idea of what to expect.

Despite growing revenue…

...The company has been delivering ever-decreasing earnings.

The chart above shows a history of SolarCity’s earnings compared to consensus estimates and guidance.

For the first quarter of 2015, the company guided a net loss of $(1.70) per share on revenue of $56.5 million. The Street expects a narrower loss, at $(1.60) per share on revenue of $57.77 million. The crowd is more constructive, projecting a net loss of $(1.52) per share, on revenue of $58.92 million.

Estimates have been falling over the past few months, as evidenced by the graph above.

Is MyPower Enough?

In a recent article, analysts at Zacks previewed SolarCity’s results. They can’t anticipate a beat, but highlight that, “the California-based company continues to pursue multiple growth ventures and marketing ploys to strengthen its presence across the nation. Launched in Oct 2014, SolarCity began its MyPower solar loan offering in eight states comprising Arizona, California, Colorado, Connecticut, Hawaii, Massachusetts, New York and New Jersey.”

“That being said, the company has failed to earn profits for nine consecutive quarters while its operating expenses have risen significantly,” the note continued. “The company’s total operating expenses rose 134.6% year over year to $134.9 million in the fourth quarter 2014.  SolarCity’s failure to restrict operating expenses may adversely impact its bottom line substantially.

"However, the money being invested in the business currently will likely boost its top line over the long haul. SolarCity however brought down its average cost per watt by 9% year over year to $2.86 during the fourth quarter 2014. It further aims to bring down this cost to $2.50 per watt by 2017.”