Sunpower (SPWR) Posts Surprise Non GAAP Profit, Shares Soar Then Slide

Sunpower (SPWR), the big US solar power manufacturer and project developer, posted a surprising non GAAP profit after the bell last night and the stock has rocketed higher today 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 .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 today, but gave much of it back closing at up around 9%.

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Here are some highlights made by executives ..

– finished the year with a better than expected 4th quarter, finishing the year with record revenue and shipments

– achieved initial volume production of next gen Maxeon Gen 3 with cell efficiency of 24%

– partnership with Total SA (which owns a majority of Sunpower) solidifies company as a leading solar player with a strong balance sheet

– Utility and Power Plant biz continues to outperform

– completed permitting process for 3 contracts with SoCo Edison for 711MW

– residential and commercial remains 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.  Today’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.

 

 

 

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