SunPower Corporation (SPWRA) reported second quarter 2010 net loss of $6.2 million or 6 cents per share, compared with a profit of $14.3 million or 15 cents per share in the year-ago quarter. Excluding one-time items, adjusted earnings of SunPower for the reported quarter were $33 million or 15 cents per share, compared with the Zacks Consensus Estimate of a loss of a penny per share. In the year-ago quarter, the company recorded adjusted earnings of $8.4 million or 9 cents per share.
Operational Results
SunPower generated revenues of $384.2 million, compared with $299.3 million in the year-ago quarter. The company’s “Residential and Commercial” and “Utility and Power Plant” segments accounted for 69% and 31% of quarterly revenues, respectively. However, revenues in the reported quarter fell short of the Zacks Consensus Estimate of $404 million. SunPower in the reported quarter generated 56% of its revenues from the European Union, 34% from the U.S. and 10% from the rest of the world.
SunPower’s quarterly gross margin on a GAAP basis was 22.9% with an operating loss of $1.7 million. In the year-ago quarter, the company’s gross margin was 13.6%, with an operating loss of $9 million.
SunPower, on an adjusted basis, reported a quarterly gross margin of 26.3% with an operating income of $33 million. This is higher than the second quarter 2009 adjusted gross margin of 16.5%, with an operating income of $8.4 million. SunPower in the reported quarter registered a gross margin of 26% in both the “Residential and Commercial” and “Utility and Power Plant” segments.
Financial Condition
SunPower at the end of the reported period had cash and cash equivalents of $383 million, compared with $615.9 million at fiscal-end 2009. Convertible debt increased to $721.5 million from $536.6 million at fiscal-end 2009.
Guidance
SunPower in the third quarter of 2010 expects GAAP loss per share in the range of 27 cents – 20 cents and adjusted earnings per share in the range of 8 cents – 15 cents. Quarterly revenues are expected in the range of $450 million – $490 million. For fiscal year 2010, the company expects GAAP earnings per share in the range of 25 cents –55 cents and adjusted earnings per share in the range of $1.35 – $1.65. Fiscal 2010 revenue is expected to be in the range of $2 billion – $2.2 billion.
SunPower Corporation 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. We retain a short-term Zacks #2 Rank on the stock, which translates into a Buy rating.
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