Solar sector-related exchange traded funds climbed after Enphase Energy (NasdaqGS: ENPH) revealed market-beating fourth-quarter results.

On Wednesday, the Invesco Solar ETF (NYSEArca: TAN) advanced 4.0% and the Global X Solar ETF (RAYS) increased 3.2%.

Meanwhile, Enphase shares surged 10.3% on Wednesday, breaking above both its short- and long-term resistance at the 50- and 200-day simple moving averages, respectively. ENPH makes up 8.3% of TAN’s underlying portfolio and 8.1% of RAYS.

Shares of Enphase Energy Inc. jumped on Wednesday after the energy technology company reported fourth-quarter profits that were well above expectations, along with record revenue, while also stating that CFO Eric Branderiz will retire after four years with the company for personal reasons, MarketWatch reports.

Furthermore, the company offered strong forward guidance, which suggested that it is coping with the ongoing global supply chain problems, Bloomberg reports.

“There was likely some investor apprehension heading into Enphase’s fourth-quarter earnings call as the calendar turning to 2022 has done little to assuage concerns over 2021’s supply chain issues,” BMO Capital Markets analyst Ameet Thakkar wrote in a note to clients.

Thakkar argued that the results indicated that there is no longer a component shortage weighing on the company, but the company still has to manage high logistic costs and longer transportation lead times due to the ongoing global supply chain issues.

“It appears the company has been able to continue to pass on a portion of these costs through price increases,” Thakkar added.

Enphase, one of the first solar companies to show Q4 results, supplies components that convert energy from photovoltaic panels to alternating current for power lines. The company’s results fueled optimism for the solar industry, as its earnings showed strong demand for panels after supply constraints impeded shipments and projects.

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