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SunPower Issues 2016 Guidance, Sees Revenue Growth Y/Y

San Jose, CA-based SunPower CorporationSPWR has announced the 2016 guidance. The company expects non-GAAP revenues to be in the range of $3.3 billion to $3.5 billion, higher than the 2015 revenue projection provided during the third-quarter 2015 earnings release. Gross margin is expected between 13% and 15%.

Earnings before interest, tax, depreciation and amortization (EBITDA) are expected in the range of $515 million to $565 million. The company has projected capital expenditure of $210 million to $240 million, and deployment of gigawatts ("GW") in the range of 1.7-2.0 GW.

On a GAAP basis, the company expects revenues in the range of $1.2 billion to $1.4 billion. Gross margin is expected between 16% and 18%, while net loss is anticipated in the range of $415 million to $365 million.

SunPower's 2016 guidance reflects the impact of planned project sales to 8point3 Energy Partners LP CAFD . On a non-GAAP basis, gross margin from these project sales are expected to be partially deferred beyond 2016. On a GAAP basis, the company expects revenues and gross margin from the sale of these projects to be deferred beyond 2016.

SunPower is one of the most forward-integrated solar companies, having over a decade-long experience in designing, manufacturing and supplying large-scale solar systems. The company is gradually shifting its revenue base from solar panel sales to the development of solar projects, power plants and engineering, procurement and construction systems.

In a bid to tap the growing demand for solar products, SunPower has already undertaken several initiatives to strengthen its existing operations and scale up production volumes. The company's customer base is spread across North America, Europe, the Middle East and Asia. SunPower is proactive in entering new markets. It recently extended its geographic footprint to England, Greece, Israel and Malta.

Recently, the company reported third-quarter 2015 adjusted earnings per share of 3 cents (adjusted for 44 cents of non-recurring items), lagging the Zacks Consensus Estimate of 14 cents by 78.6%. Reported earnings also plunged 88% from the year-ago figure of 25 cents.

Lower revenues, along with higher operating expenses, negatively impacted the company's third-quarter results. Moreover, strategic moves like dropping down assets to 8point3 Energy Partners, a holding company formed this year with First Solar FSLR , instead of selling power plants directly to other companies, affected results.

On a non-GAAP basis, the company expects revenues in the range of $1.25-$1.30 billion for the fourth quarter and $2.5-$2.55 billion for 2015. Gross margin is estimated between 28% and 29% for the fourth quarter, and 23% and 24% for the full year. SunPower expects adjusted earnings per share in the range of $1.95 to $2.05 for 2015.

Zacks Rank

Currently, SunPower has a Zacks Rank #3 (Hold). A better-ranked stock in the same space is Canadian Solar Inc. CSIQ carrying a Zacks Rank #2 (Buy).

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CANADIAN SOLAR (CSIQ): Free Stock Analysis Report

FIRST SOLAR INC (FSLR): Free Stock Analysis Report

SUNPOWER CORP-A (SPWR): Free Stock Analysis Report

8POINT3 ENERGY (CAFD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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