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SunPower Q1 Results: Italy Impacts Revenue

By Eric Wesof

SunPower (Nasdaq:SPWRA), the manufacturer of the world's highest efficiency crystalline silicon photovoltaic panels, just reported its first-quarter 2011 results. This comes on the heels of its recent big news of being acquired by French oil and gas concern Total. Margins were down and the firm moved to a slight loss after a profitable Q4 in 2010.

  • Q1 2011 revenue of $451 million vs. $347 million in Q1 2010
  • Q1 GAAP gross margin of 19.6 percent
  • Q1 2011 ending cash, restricted cash and equivalents balance of $671 million
  • Module cost in the quarter was $1.68 per watt

Tom Werner, SunPower president and CEO said:

  • “Our revenue was lower than planned as a result of changing market conditions in Europe."
  • "We exceeded our manufacturing cost reduction targets for the quarter and remain on plan to achieve our efficiency-adjusted panel cost-per-watt target of $1.08 in the fourth quarter of this year."
  • “We were also pleased to recently announce Total’s transformational investment in SunPower through a share tender offer which began on May 3, 2011." (That was a $1.3 billion investment.)
  • Focused on reducing inventory levels -- the firm is working through over-ordered inverters.

Other key milestones:

  • $1.2 billion U.S. Department of Energy loan guarantee conditional commitment and final county permit approval awarded for 250-megawatt California Valley Solar Ranch
  • 19-megawatt Alamosa power plant for Xcel Energy completed (it's the largest solar power plant in Colorado)
  • 11-megawatt rooftop contract awarded by Tucson Electric Power
  • 48-megawatt supply agreement signed with Toshiba
  • 75-megawatt per year Silicon Valley solar panel manufacturing facility dedicated with California Governor Brown and U.S. Energy Secretary Chu

Italy

The firm is number two in market share in Italy. Italian policy has moved to a rooftop market.

“Revenues and inventory levels in the first quarter were impacted by the pause in business activity in Italy, as several projects awaited clarity on the new tariffs,” said Dennis Arriola, SunPower CFO. “Italy’s new feed-in tariff, announced earlier this month, follows the trend across Europe of favoring rooftop solar investment. SunPower’s high-efficiency systems and flexible dealer/partner network positions us effectively to respond to the uncapped rooftop market in Italy and other countries."

Q2 Guidance

For the second quarter of 2011, SunPower expects revenue to be in the range of $500 million to $550 million and megawatts recognized to be in the 160 to 190 megawatts range.

2011 Guidance

For fiscal year 2011, the company expects megawatts recognized to be consistent with previous guidance of 825 to 920 megawatts.

Source: SunPower Posts Slight Loss as Italy Impacts Revenue