SunPower Corporation
(
SPWR
), a Silicon Valley-based manufacturer of high-efficiency solar
cells, reported a second quarter 2012 adjusted loss of 2 cents per
share, versus a loss of 32 cents in the year-ago quarter. Loss in
the reported quarter was also far narrower than the Zacks Consensus
Estimate of a loss of 21 cents.
On a GAAP basis, the company posted a loss of 71 cents per share
versus a loss of $1.51 in the year-ago quarter.
During the reported quarter, the variation of 69 cents between GAAP
and adjusted loss came from charges related to Utility and power
plant project of 12 cents, charges related to restructuring plan of
2 cents, charges related to amortization of intangible assets of 2
cents, acquisition and integration costs of 1 cent, loss on change
in European government incentives of 38 cents, non-cash interest
expense of 7 cents, changes in manufacturing step-reduction program
of 4 cents, and a gain on sale of equity interest in unconsolidated
investee of 3 cents.
Operational Results
SunPower generated revenues of $595.9 million, up 0.6% year over
year. It was however below the Zacks Consensus Estimate of $608
million.
During the quarter under review, revenue generated in the Americas
was $392.3 million compared with $370.3 million in the prior-year
period. Revenues in Europe, the Middle East and Africa (EMEA) were
$155.4 million versus $182.1 million in the year-ago quarter.
Revenues from Asia-Pacific (APAC) were $48.2 million, up from $39.8
million in the year-ago period.
Financial Condition
At the end of the reported period, SunPower had cash and cash
equivalents of $366.3 million, compared with $245.8 million at the
end of the second quarter of 2011. Convertible debt decreased to
$430.6 million from $620.0 million at year-end 2011.
During the quarter, net cash used for operating activities was
$44.6 million compared with $105.9 million in the prior-year
period. Capital expenditures during the period were $29.9 million
versus $23.4 million in the year-ago period.
Guidance
For the third quarter of 2012, the company expects non-GAAP revenue
in the range of $550 million to $625 million, and non-GAAP loss per
share of 20 cents to 5 cents. On a GAAP basis, the company expects
revenue of $545 million to $620 million, and net loss per share of
25 cents to 10 cents for the third-quarter. For fiscal 2012, the
non-GAAP revenue guidance is in a band of $2,600 million and $2,800
million, while GAAP revenue is forecast in a range of $2,400
million to $2,600 million.
SunPower remains committed to achieving break even or better
non-GAAP profitability and a year-end 2012 unrestricted cash
balance of more than $300 million, while investing in cost
reduction initiatives.
Our Take
SunPower is a vertically-integrated solar manufacturer, with a
presence along the entire solar value chain from cells through
installation. However, in the near term, the company is witnessing
cascading Average Selling Prices ("ASP") and margins in its
residential and small commercial markets segment. We expect this
trend to continue in the near future with valuation further
restrained by the higher cost structure of the company compared to
its peers, the glut of solar panels in the market, lower ASPs and
foreign exchange risk.
The company presently retains a short-term Zacks #3 Rank (Hold). We
have a long-term Underperform recommendation on the stock.
The company mainly competes with
Suntech Power Holdings Co. Ltd.
(
STP
) and
First Solar, Inc.
(
FSLR
).
FIRST SOLAR INC (FSLR): Free Stock Analysis
Report
SUNPOWER CORP-A (SPWR): Free Stock Analysis
Report
SUNTECH PWR HLD (STP): Free Stock Analysis
Report
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