SunPower Posts Surprise Non-GAAP Q4 Profit; Shares Soar Then Slide

| About: SunPower Corporation (SPWR)
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SunPower (NASDAQ:SPWR), the big US solar power manufacturer and project developer, posted a surprising non GAAP profit after the bell Thursday night and the stock rocketed higher on Friday on heavy volume. The CEO acknowledged it was a messy quarter of one time adjustments and costs, but on an adjusted basis taking out one time charges, the company posted $0.16/share in profit which was well ahead of analyst estimates that called for a .05/share loss. Traders sent the stock up nearly 30% at the high point on Friday, but gave much of it back closing at up around 9%.

Here are some highlights made by executives ..

  • Company finished the year with a better than expected 4th quarter, finishing the year with record revenue and shipments.
  • Company achieved initial volume production of next gen Maxeon Gen 3 with cell efficiency of 24%.
  • Partnership with Total SA (NYSE:TOT) (which owns a majority of SunPower) solidifies company as a leading solar player with a strong balance sheet.
  • Utility and Power Plant business continues to outperform.
  • Completed permitting process for 3 contracts with SoCo Edison for 711MW.
  • Residential and commercial segments remain challenging, but maintained leadership position driven by strong demand for residential leasing product.
  • Tenesol acquisition will expand global footprint across 18 countries.

Looking ahead, the company is providing revenue guidance of $500-$575 million for this quarter and an EPS loss of $.05-$.20. The guidance doesn’t compare well to analyst estimates for the quarter ($610, -$.11) and is probably the reason the stock erased much of the gain by the end of the day. For the full year, the company sees revenue of $2.6 – $3 billion (analysts predict $2.72 billion) and is committed to breaking even or achieving greater profitability. Not exactly inspiring words.

Technically, I like the stock at this level. Friday’s reversal likely means it will be under a bit of pressure and test support at the 50 DMA in the coming days, but a hold there would be a real nice entry point on a leading US solar company.

Disclosure: None