Investing.com -- Shares in SolarCity Corporation (O:SCTY) plummeted nearly 20% in after-hours trading after the solar energy provider reported larger than expected losses over its last quarter on Thursday afternoon.
For SolarCity's third quarter, which ended in late-September, the Silicon Valley-based company, lost $234.3 million, down from losses of $70.1 million during the same quarter last year. Excluding certain items, SolarCity reported losses of 2.10 per share, below analysts' forecasts of negative earnings of 1.95.
SolarCity reported a GAAP gross margin of 22%, which it said was impacted by a $17.8 million due to expenses stemming from its 30-year warranty program. SolarCity also incurred expenses of $12.3 million related to the non-cash fair value impact from its hedging investment strategies.
At the same time, SolarCity's revenues nearly doubled from $58.3 million to $113.9 million for the three-month period. The solar energy provider company's revenues grew exponentially, amid sharp increases in residential installations.
Solar energy companies such as SolarCity are expected to accelerate operations over the next year before a federal solar investment tax credit (ITC) is expected to expire at the end of 2016. By 2017, the renewable energy tax credit is scheduled to drop from 30 to 10%. Industry analysts estimate that the tax liability reduction could result in the loss of 80,000 jobs in the sector.
Moving forward, SolarCity expects to have installations of 280 to 300 megawatts in the fourth quarter, resulting in positive cash flow for the period. SolarCity is hopeful the quarter could help it open fiscal year 2016 on strong footing.
"Continuing to set the stage for our growth in 2016, our sales activity outpaced our installations by a wide margin with 345 MW Booked and 35,535 new net Customers added in the quarter," SolarCity wrote in a letter to shareholders. "This represented a decline compared to the 395 MW Booked in Q2 2015 owing in part to the implementation of a new cancellation policy. Previously, we automatically cancelled uninstalled contracts that had been inactive for 120 days."