SolarEdge Technologies shares dropped 23.67% to $87 in premarket trading on Friday after preliminary third quarter revenue came in below prior guidance, with further pressure on revenue expected in the fourth quarter.
The smart energy technology company said it experienced substantial unexpected cancellations and pushouts of existing backlog from its European distributors during the second part of the third quarter. It attributed the cancellations and pushouts to higher-than-expected inventory in the channels, and slower-than-expected installation rates.
"In particular, installation rates for the third quarter were much slower at the end of the summer and in September where traditionally there is a rise in installation rates," Chief Executive Zvi Lando said.
Third-quarter revenue is now expected to range between $720 million and $730 million, down from prior guidance set between $880 million and $920 million.
SolarEdge also forecasts significantly lower revenue in the fourth quarter as inventory destocking continues.
Lando said the adjusted guidance is unrelated to the Israel-Hamas war. He added that while there's been some impact on daily routines at headquarters, offices and facilities around the world, including those in Israel, are open. The company is manufacturing and providing customer support without interruption.