Commodity prices are on the rise. The price of steel, for instance, is up by 10% since the start of April and has increased by more than 100% year-over-year. Freight costs have also surged – ocean freight is up by over 145% in the past year and truck freight costs have increased by over 30%.
These issues are a problem for Array Technologies (ARRY) – steel makes up almost half of the company’s COGS (cost of goods sold). The company reported Q1 earnings on Tuesday and cited the price hikes and an ongoing assessment of open contracts as the reasons why it has taken FY21 guidance off the table.
The rest of the quarter’s financials weren’t great but that was expected. Revenue dropped by 43.8% year-over-year to $245.93 million yet still beat the Street’s forecast by $7.07 million. Non-GAAP EPS hit $0.19, one cent below the consensus estimate.
J.P. Morgan’s Paul Coster remains a fan of the solar power equipment maker, but acknowledges the supply chain costs are creating a cloudy near-term outlook.