Tuesday, November 9, 2010

SunPower Corporation (NASDAQ: SPWRA): Q3 Earnings Preview 2010

SunPower Corporation (NASDAQ: SPWRA) is scheduled to release its third-quarter earnings afterthe closing bell on Thursday, November 11, 2010. Analysts, on average, expect the company to report earnings of 13 cents a share on revenue of $471.33 million. In the year ago period, the company posted earnings of 42 cents per share on revenue of $466.31 million.

SunPower Corporation, together with its subsidiaries, designs, manufactures, and markets solar electric power technologies. The company operates in two segments, Components and Systems.

In the preceding second quarter, the San Jose, California-based company's net loss was $6.2 million, or 6 cents per share, compared to a profit of $14.3 million, or $0.15 per share, in the same quarter a year-ago. Adjusted earnings for the quarter totaled $0.15 per share, compared to $0.09 per share in the year-ago quarter. Revenue increased to $384.2 million from $299.3 million. Analysts, on average, expected the company to report earnings of 10 cents per share on revenue of $401.17 million. 

At its last earnings call in August, the company said that its expects third-quarter GAAP loss per share in the range of $0.27 to $0.20 and non-GAAP earnings per share in the range of $0.08 to $0.15. Revenue for the period is anticipated in the range of $450 to $490 million. The company also said that it it expects to record 65% of its 2010 revenue in the second half.

SunPower expects its consolidated gross margins to be in the range of 18% to 22% in the third and fourth quarters of 2010. The gross margin in the second half of the year will not materially benefit from revenues related to sales of electricity and will include a larger proportion of sales from lower margin third-party panels and planned price reductions in the U.S. and Germany.

For the fiscal year 2010, the company anticipates GAAP earnings per share in the range of $0.25 to $0.55 and non-GAAP earnings per share in the range of $1.35 to $1.65. Revenue for the period is expected in the range of $2.0 billion to $2.2 billion. 

SunPower enjoys premium pricing because of its increased efficiencies, and the declining production costs should help SunPower continue to generate a healthy profit margin. Looking ahead to fourth quarter of 2010, the company expects its efficiency adjusted cost per watt at the panel level to be $1.36 per watt. SunPower expects its ts efficiency adjusted cost per watt to reach $1.08 in fourth quarter of 2011.

Solar industry as a whole has benefited from continues strong demand due to growing awareness about global warming, skyrocketing oil prices, cheap financing and technological advances. In September, SunPower announced that it will receive a grant of approximately $1.8 million from the California Solar Initiative Research, Development, Deployment and Demonstration (CSI RD&D) Program. This grant will enable SunPower to research photovoltaic (PV) energy storage for large commercial applications. Recently, the company announced that it completed the sale of the equity in the first two phases of Montalto di Castro solar park, Italy's largest solar photovoltaic (PV) power park, for approximately E49 million.

In terms of stock performance, SunPower shares have lost 48 percent over the past year.

Full Disclosure: None.
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