SMA Solar Technology (ETR:S92) announced its First Quarter 2024 Results, reporting revenue of €361.8m, a decrease of 1.5% from the same period in 2023. Net income was €28.5m, down 45% from the previous year, resulting in a profit margin of 7.9% compared to 14% in 1Q 2023. The decline in margin was primarily due to higher expenses, leading to earnings per share of €0.82, down from €1.49 in 1Q 2023.
Despite missing analyst estimates by 16% and 27%, respectively for revenue and earnings, the company’s forecasted growth over the next three years is expected to be slightly lower than that of the Semiconductor industry in Germany at an annual rate of 7.4%. This indicates a challenging quarter for SMA Solar Technology.
The German Semiconductor industry has been mixed, with SMA Solar Technology’s shares down by 5.7% from the previous week. Investors should be aware of three warning signs before investing in this company, two of which are particularly concerning:
Firstly, there has been a decline in net income and profit margins due to higher expenses leading to lower earnings per share compared to the previous year and analyst estimates for Q1-2024.
Secondly, there has been a decline in revenue compared to analyst estimates for Q1-2024 and slightly below the expected annual growth rate for the Semiconductor industry in Germany over the next three years.
Finally, investors should be aware that this industry is highly competitive and subject to market fluctuations, which could affect SMA Solar Technology’s performance further down the line.
In conclusion, while SMA Solar Technology reported lower-than-expected revenue and earnings for Q1-
