SunPower Corporation (SPWRA): Earnings Preview

SunPower Corporation (SPWRA : 18.16, 0.28) is scheduled to report first quarter 2010 results on Thursday, April 22.

SunPower Corporation is a vertically integrated solar products and services company that designs, manufactures and markets high-performance solar electric power technologies. The company operates through two business segments: components segment and systems segment. The Systems Segment represents sales directly to system owners and developers and includes engineering, procurement, construction (EPC) and other services relating to solar electric power systems that integrate the company's solar panels and balance of systems components, as well as materials sourced from other manufacturers. The Components Segment primarily represents sales of the Company's solar panels and inverters to solar systems installers and other resellers, including the company's third-party global dealer network. On April 14, 2009, the Company completed the acquisition of Tilt Solar. In March 2010, the Company acquired SunRay Renewable Energy.

Dec-Q operating EPS of $0.32 vs. $0.27 is $0.07 below my estimate. Sales rose 18% from Oct-Q, reflecting higher shipments in all geographies. Gross margins, below my view, narrowed due to foreign exchange. As expenses rose, the operating margin contracted. Separately, the internal audit committee concluded that '08-'09 income was overstated by about $17 million. I still see pricing pressure from Asia-based competitors with rising conversion efficiencies. While Q4 results confirmed strength of company's components biz, its ability to maintain price premium, guidance suggests back-end-loaded year, higher expenses tied to SunRay purchase. But I feel the company is taking right steps to secure strong pipeline in U.S., Europe, which will become even more important in possible oversupplied environment in H2 '10.

For the 1st qtr 2010, analysts' estimates range from $0.0 to $0.36, with a consensus estimate of $0.09. The consensus EPS forecast has decreased over the past week from -$0.36 to $0.35 and decreased over the past three months from $0.35 to $0.36.

Labels: Earnings, Solar Stocks, Solar Technology, SPWRA, SunPower Corp

posted by Ertai at 10:27 AM