SunPower Corporation’s (SPWRA) second quarter 2011 adjusted loss per share came in at 32 cents beating the Zacks Consensus Estimate of a loss of 33 cents. However, earnings were below the year-ago earnings of 3 cents per share.
On a reported basis the company posted a loss of $1.51 per share versus a loss of 7 cents in the year-ago quarter.
In the second quarter of 2011, the variation of $1.19 per share between reported and adjusted earnings came from loss on change in European government incentives (62 cents), tax effects (28 cents), investment related costs (13 cents), non-cash interest expense (7 cents), amortization of intangible assets (7 cents), and amortization of promissory notes (2 cents).
Operational Results
SunPower generated revenues of $592.3 million versus the Zacks Consensus Estimate of $586 million and $384.2 million in the previous year’s quarter. The company’s ‘Residential and Commercial’ and ‘Utility and Power Plant’ segments accounted for 48.9% and 51.1% of quarterly revenues, respectively.
Revenues from ‘Utility and Power Plant’ rose to $302.4 million from $120.1 million in the prior-year quarter. In contrast, revenue from ‘Residential and Commercial’ rose only marginally to $289.8 million from $264.2 million in the year-ago quarter. Overall, the company incurred a net loss of $147.9 million versus a net loss of $6.2 million in the year-ago quarter.
Financial Condition
SunPower at the end of the reported period had cash and cash equivalents of $245.8 million, compared with $605.4 million at fiscal-end 2010. Convertible debt increased marginally to $605.6 million from $591.9 million at fiscal-end 2010.
Outlook
SunPower is a vertically integrated solar company with presence across the entire solar value chain. The company designs, develops, manufactures, markets and sells high-performance solar electric power technology products, systems and services worldwide for residential, commercial and utility-scale power plant customers. The company’s semiconductor-based solar cells and solar panels, which convert sunlight into electricity, are manufactured using proprietary processes and technologies. Earlier in June 2011, oil giant TOTAL S.A. (TOT) acquired 60% of SunPower.
SunPower expects its quarterly revenue for the third quarter of 2011 to be in the range of $700 million–$750 million, and adjusted earnings in the range of $0.05–$0.15 per share.
SunPower currently retains a short-term Zacks #4 Rank, which translates into a Sell rating. Over the longer run we maintain our ‘Outperform’ recommendation on the company.
Zacks Investment Research
