SunEdison Posts Wider Loss as CEO Slows Growth, Seeks Cash

  • Strategic shift to focus on profitable projects, countries
  • World's biggest clean-energy developer slumped 80% since June

SunEdison Inc. reported a wider loss than analysts had estimated for the third quarter as Chief Executive Officer Ahmad Chatila cut staff and slowed growth to appease investors concerned about the clean-energy company’s financial liquidity. The shares plunged to the lowest in more than two years.

The loss of $284 million was little changed from the $283 million deficit of a year earlier, the Maryland Heights, Missouri-based company said in a statement Tuesday. Excluding some items, SunEdison’s loss of 92 cents a share was bigger than the 65-cent average of 13 analyst’s estimates compiled by Bloomberg. Sales rose to $476 million from $469 million.

The world’s largest renewable-energy developer has announced or completed more than $4 billion in acquisitions this year as it expands all over the world, leading to questions whether the company has the cash needed to fund additional projects. Its market value has slumped by more than 80 percent since June, prompting Chatila to sell some projects, fire 15 percent of the workforce and scale back growth plans by about 20 percent. 

“Some of the recent actions should set the stage for positive operating cash flow over the next few quarters,” Vishal Shah, an analyst at Deutsche Bank AG, said in a research note Monday before the statement was released. “Which would help alleviate some of the balance sheet concerns.”

‘Boring’ Company

Chatila said Oct. 7 he expects to build 3,300 megawatts to 3,700 megawatts in 2016, down from an earlier forecast of 4,500 megawatts. He reaffirmed that forecast on a conference call Tuesday.

“Right now I want the company to become more boring,” Chatila said on the call. “Boring, and cash-flow generating.”

SunEdison controls two companies to buy and hold wind and solar farms it builds. TerraForm Power Inc. has lost more than 40 percent of its value this year and TerraForm Global Inc. about half of its value, and Chatila said he doesn’t expect to sell any power plants to them in 2015 or 2016.

SunEdison slumped 22 percent to $5.77 at the close in New York, the lowest since May 2013.

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