SunPower Reports Third-Quarter 2014 Results

SunPower Corp. headquarters in San Jose, CA on December 12, 2012.

SunPower Corp. (NASDAQ: SPWR), the Silicon Valley based  designer and manufacturer of high efficiency solar panels and systems announced financial results for its fiscal 2014 third quarter.  It was a good quarter financially as well as operationally, as they achieved a major milestone by producing their one billionth solar cell, representing a cumulative output of more than three gigawatts.

Net income of $32 million was up substantially from the $14.1 million earned second quarter but gross margin saw a significant decrease to 16.4% from 18.5% the quarter earlier and the whopping 29.4% they realized in the third quarter of 2013.  This bears watching.

($ Millions, except percentages and per-share data)

3rd Quarter

2014

2nd Quarter

2014

3rd Quarter

2013

GAAP revenue

$662.7

$507.9

$657.1

GAAP gross margin

16.4%

18.5%

29.4%

GAAP net income

$32.0

$14.1

$108.4

GAAP net income per diluted share

$0.20

$0.09

$0.73

Non-GAAP revenue1

$704.2

$621.1

$619.5

Non-GAAP gross margin1

16.7%

19.5%

19.1%

Non-GAAP net income1

$46.4

$43.9

$58.8

Non-GAAP net income per diluted share1

$0.30

$0.28

$0.44

1Information about SunPower’s use of non-GAAP financial information is provided under “Use of Non-GAAP Financial Measures” below.

“Our third-quarter results reflect another strong quarter of execution, driven by significant demand for both distributed generation and power plant systems,” said Tom Werner, SunPower president and CEO.  “Solar power is increasingly competitive with traditional energy sources in a number of markets, and we are well positioned to capitalize on this large opportunity by virtue of our industry-leading technology, competitive cost structure, substantial project pipeline, and ongoing manufacturing capacity expansion.

“Regionally, North America was once again the biggest contributor.  Construction of the 579-megawatt (MW) ac Solar Star Projects for MidAmerican Solar is on plan with 309-MW now connected to the grid.  Construction of our 135-MW Quinto project is proceeding and we recently closed financing for the project, consistent with our holdco strategy.  We also continue to see strong demand in the commercial sector as we booked more than 20-MW of power purchase agreements (PPA); including a 16-MW ground mounted solar project for the University of California at Davis.  When complete, our UC Davis system will be the largest solar power plant on any U.S. university or college campus.  These commercial system PPAs are also structured in a way that is consistent with our holdco strategy.  We also added both new and repeat cash customers to our commercial backlog including a 10-MW expansion agreement with Verizon.  In the residential channel, third quarter bookings were up more than 50 percent sequentially as customers continued to choose SunPower for their solutions to take advantage of our quality, performance and flexible financing options.

“In EMEA, we saw stable pricing against the backdrop of an evolving distributed generation market environment and continue to adapt our go-to-market plans accordingly.  In the power plant channel, we were awarded a four project, 41-MW supply agreement for Compagnie du Vent, a subsidiary of French utility GDF SUEZ in connection with the recent French national tender program.  With this supply agreement and our booked power plant projects, including the construction start of our 85-MW project in South Africa this quarter, we are confident in achieving our goals for this region,” continued Werner.

Japan remained the key driver of our Asia Pacific business, accounting for 28 percent of total shipments in the third quarter.  The very strong demand we see from Japan is a testament to the competitive advantage of our high efficiency technology in area-constrained sites and rooftops.  In China, we continued to expand our activities through our SunPower® C7 Tracker (C7) joint venture and expect to install more than 30-MW of C7 power plant systems by the end of the year.  With strong positions in both Japan and China, we expect Asia Pacific to continue to be a major market for SunPower going forward.

Fourth Quarter 2014 Financial Outlook

The company’s fourth quarter 2014 consolidated non-GAAP guidance is as follows: revenue of $575 million to $625 million, gross margin of 19 percent to 21 percent, net income per diluted share of $0.15 to $0.30 and megawatts recognized in the range of 300 megawatts to 340 megawatts.  On a GAAP basis, the company expects revenue of $675 million to $725 million, gross margin of 22 percent to 24 percent and net income per diluted share of $0.20 to $0.35.

For fiscal year 2014, the company’s expectations are as follows:  non-GAAP revenue of $2.58 billion to $2.63 billion, gross margin of 19 percent to 20 percent, net income per diluted share of $1.25 to $1.40, capital expenditures of $150 million to $170 million and gigawatts recognized in the range of 1.26 gigawatts to 1.3 gigawatts.  On a GAAP basis, the company expects revenue of $2.535 billion to $2.585 billion, gross margin of 20 percent to 21 percent and net income per diluted share of $0.95 to $1.10.

Fourth quarter and fiscal year 2014 GAAP guidance excludes a potential timing benefit of approximately $450 million in revenue and$0.90 in earnings per share related to the real estate accounting treatment of our 579-MW Solar Star projects.  This benefit may occur in the fourth quarter but was not included in the company’s current fourth quarter GAAP guidance due to the timing uncertainty of this benefit.

 

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This post was prepared by Solar Thermal Magazine staff.