What TerraForm Power Inc (NASDAQ:TERP) Wants You To Keep In Mind

TerraForm Power Inc (NASDAQ:TERP) and its sibling TerraForm Global Inc (NASDAQ:GLBL), two yieldcos affiliated with the bankrupt Sunedison Inc, have a message for you: don’t expect their 2Q2016 earnings report any time soon.

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The yieldcos have told regulators that they have identified some problems in their internal controls that would prevent them from filing their financial reports for Q2 on time.

But it is not just the 2Q2016 financial report that the yieldcos are delaying. Up to now the companies have not filed their annual reports for the fiscal year ended December 31. On top of that, they have also not filed earnings reports for their 1Q2016.

What TerraForm Power and its sibling told the regulator is that they will need more time to prepare their financial statements for filing. But they have not committed to a specific date on when they expect to be through with the work on financial statements so that they can file their reports.

In the notice of delayed filing to the regulator, TerraForm Power and TerraForm Global cited that they had discovered what they only referred to as “material weaknesses” relating to their internal controls that have impacted their financial reporting.

Sunedison also made a similar statement referring to “material weaknesses” in its financial reporting. Sunedison, too, had delayed its filings and hinted that the problems it was facing related to a new IT system that it had implemented.

As yieldcos, TerraForm Power and TerraForm Global hold renewable energy assets and in this case the two yieldcos acquired their assets through the parent Sunedison.

1Q2016 preliminary earnings

For 1Q2016, TerraForm Power released preliminary earnings results that showed it generated revenue of between $151 and $159 million. That compared with revenue of $70.5 million that it generated in the same period last year. But it said that it suffered a loss of between $32 and $46 million, indicating an improvement from a loss of $83.7 million in the comparable period last year.

Selling stake in TERP

Sunedison is said to be looking to sell its stakes in TerraForm Power and TerraForm Global and several buyout firms have shown interest in buying the stakes. Sunedison owns all the Class B shares in TERP.

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