Boston, MA 08/21/2014 (wallstreetpr) –Real Goods Solar, Inc. (NASDAQ:RGSE) made a bigger loss in its 2Q that was mainly linked to the challenges the company has had in the commercial installations segment. The company said it would now focus exclusively on residential installations where margins have remained impressive even as the commercial line authored troubles, Bloomberg stated in an article. In addition to refocusing its business approach, Real Goods Solar also ousted its CEO, Kamyar Mofid and replaced him with an insider whose department has been healthy in the company.
CEO ousted
The U.S. solar products company said that Mofid, under whose watch the bigger 2Q loss was realized, would be replaced with Dennis Lacey, who is the president of the company’s residential rooftop unit. Shares of the company declined about 17% in the last session, and they remain down nearly 40% so far this year. Troubles in the commercial installations have been responsible for the slide in the stock price even as investors worry about the future.
However, with the changes at the top management, the company hopes to chart a new and positive path. A move away from the money-bleeding commercial installation is expected to help Real Goods Solar, Inc. (NASDAQ:RGSE) preserve the value and also grow at the same time and analysts have termed the latest development a sound move for the company.
The residential rooftop unit gives gross profit margins of about 20%, which compares unfavorably with the negative results in the commercial installations segment.
Dangers of narrow gross margins
Real Goods Solar, Inc. (NASDAQ:RGSE) reported a net loss of $21.4 million or $0.46 a share for the 2Q, which compared poorly with a net loss of $2.91 million or $0.11 a share in the like quarter a year ago. The wider net loss came about as a result of a decline in gross margin from 23% to just 11%, mainly because of the troubled commercial sector.
Analysts at Cowen & Co. rate the company as equivalent of a “hold.”
