Earnings Season: SunPower Shows Profitable 2013, Strong 2014 Guidance

 |  About: SunPower Corporation (SPWR)
by: Greentech Media

Talk of C7 orders and 23-percent-efficient commercial modules

SunPower (NASDAQ:SPWR) CEO Tom Werner reported "strong" Q4 2013 results for his vertically integrated solar power company. SunPower had Q4 2013 revenue of $638 million and Q4 earnings per share of $0.15 with $22.3 million in income. The company recognized total 2013 production of 1,134 megawatts for a total revenue of $2.507 billion and net income of $95.6 million.

Ben Kallo at Baird writes that SunPower "beat estimates, has increasing demand for its products, and is consistently reducing production costs." The Baird analyst notes that SunPower beat estimates across all metrics in Q4 2013.

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Werner saw the Q4 results reflecting "robust worldwide demand," with an improvement in the EMEA region along with record (24 percent of total) shipments to Japan. He cited a 20 percent cost reduction for modules and a 24 percent price reduction in the 1.5-megawatt Oasis system.

Other highlights of SunPower's recent performance:

  • Full commercial operation of the 250-megawatt California Valley Solar Ranch project
  • Capacity expansion with Fab 4 continuing at 35 percent lower cost per watt than Fab 2
  • Aiming for 23 percent efficient X-series panels by end of 2015.
  • The firm is engaged in pilot energy storage projects
  • An order for a 20-megawatt C7 (low-concentration PV) installation at a data center has been booked. More details will be available on this project later in the year.

Baird analyst Kallo adds, "We expect SPWR to launch an ABS in the intermediate term to finance its residential projects and believe SPWR could receive an interest rate equal to or less than SCTY's (4.79%) due the low degradation and high efficiency rates of its panels." Werner also spoke of a "YieldCo as a landing spot for the 135-megawatt Quinto" project.

SunPower's Howard Wenger said, "North America was once again our strongest market," adding that this was a strong quarter in the U.S. residential market as well. The company is no longer "finance-constrained" and expects a growth in leasing in 2014. SunPower has signed about 20,500 residential leases in the U.S., with total bookings of over 160 megawatts.

The analyst firm suggests that SunPower's "panel technology and manufacturing capabilities should give it a long-term edge over Solar City."

Q1 and Fiscal Year 2014 Financial Guidance

The firm expects Q1 2014 revenue of $575 million to $625 million and gross margin of 18 percent to 20 percent.

On a GAAP basis, the company expects GAAP revenue of $2.45 billion to $2.65 billion and gross margin of 20 percent to 22 percent.

SunPower claims to have visibility into a 6-gigawatt pipeline of business.

Business relationship disclosure: Greentech Media is an editorial team. This article was written by Editor-in-Chief Eric Wesoff. We did not receive compensation for this article, and we have no business relationship with any company whose stock is mentioned in this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.