SunPower Corporation’s (SPWRA) fourth quarter 2010 adjusted earnings (including stock-based compensation but excluding amortization of intangibles) of $1.33 per share beat the Zacks Consensus Estimate of 88 cents and year-ago earnings of 35 cents.
On a reported basis the company clocked earnings of $1.58 per share versus 21 cents in the year-ago quarter. The upside came primarily from margin expansion and strong revenue growth.
Operational Results
SunPower generated revenues of $937.1 million versus the Zacks Consensus Estimate of $933 million and $547.9 million in the previous year’s quarter. The company’s “Residential and Commercial” and “Utility and Power Plant” segments accounted for 29% and 71% of quarterly revenues, respectively.
Revenues from “Utility and Power Plant” nearly tripled to $664.16 million from $224.86 million in the prior-year quarter. In contrast, revenue from “Residential and Commercial” dropped to $272.92 million from $323.08 million in the year-ago quarter.
SunPower’s gross margin for the quarter expanded 510 basis points to 25.4% versus 20.3% year-over-year. Overall, the company clocked a net income of $152.3 million versus $8.5 million in the year-ago quarter.
Financial Condition
SunPower at the end of the reported period had cash and cash equivalents of $605.4 million, compared with $615.9 million at fiscal-end 2009. Convertible debt increased to $591.9 million from $536.6 million at fiscal-end 2009.
Outlook
SunPower is a vertically integrated solar company with presence across the entire solar value chain. The company’s semiconductor-based solar cells and solar panels, which convert sunlight into electricity, are manufactured using proprietary processes.
SunPower expects its GAAP net loss to be in the range of 9 cents – 3 cents per share in the first quarter of fiscal 2011, and adjusted earnings in the range of 15 cents – 21 cents per share. Quarterly revenue is expected to be in the range of $475 million – $525 million.
SunPower for fiscal 2011 projects GAAP earnings in the range of 70 cents – 90 cents per share, adjusted earnings in the range of $2.00 – $2.20 per share. Fiscal 2011 revenue is expected to be in the range of $2.80 billion – $2.95 billion.
SunPower currently retains a short-term Zacks #4 Rank on the stock, which translates into a Sell rating. In the near-term we would advise investors to focus on the Zacks #1 Rank (short-term Strong Buy rating) peers like LDK Solar Company Ltd (LDK).
LDK SOLAR CO (LDK): Free Stock Analysis Report
SUNPOWER CORP-A (SPWRA): Free Stock Analysis Report
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