By Nichola Groom
LOS ANGELES Oct 30 SunPower Corp on
Wednesday reported a higher-than-expected profit, raised its
2013 earnings outlook and announced investment in a new factory,
a move it said signaled the global solar market has turned
Wall Street initially cheered the results, sending SunPower
shares up in after-market trading. The stock later reversed
course to trade down 3 percent when the company's chief
executive gave a 2014 earnings per share forecast that fell
short of expectations due to expenses for the new plant and a
higher share count.
After several years of enduring a global oversupply of solar
panels, rapidly falling product prices and elusive profits,
SunPower is once again making money and expanding production.
The company, which is majority owned by French energy giant
Total SA, is building several major solar power plants
in California. It is benefitting from strong residential demand
in the United States and gaining business in the fast-growing
Japanese market. The once-stalled European market is improving.
"We see a very positive market across all geographies,"
Chief Executive Tom Werner said in an interview.
SunPower plans to build a 350 megawatt solar cell factory in
the Philippines that will come online in 2015. In the meantime,
it will run its factories at full capacity next year.
"It gives you some sense of our belief in the future,"
Werner said. "We are very optimistic about the next few years."
SunPower raised its 2013 earnings outlook to a range of
$1.30 per share to $1.50 per share, well above its prior outlook
of $1 to $1.30 per share.
The revenue view was tightened to a range of $2.52 billion
to $2.57 billion from a previous range of $2.5 billion to $2.6
On a conference call with analysts, Werner said earnings per
share for 2014 would be about $1, below the $1.23 per share
analysts are expecting, according to Thomson Reuters I/B/E/S.
He said the company's results would "increase meaningfully"
in 2015 thanks in part to the new production capacity.
"The stock isn't going to be dead money throughout 2014,"
said Baird analyst Ben Kallo, who has an "outperform" rating on
SunPower shares. "There is a lot of good business coming in...
You will have some short term focused investors selling on some
of those comments. Longer term investors will remain committed."
SunPower's solar panels are the most efficient in the
industry at converting sunlight into electricity, allowing the
company to command a price premium for them in the market. The
efficiency of the company's panels has served SunPower well in
Japan, where solar system prices are high and customers favor
highly efficient panels.
Net income for the third quarter was $108.4 million, or 73
cents per share, compared with a net loss of $48.5 million, or
41 cents per share, a year ago.
Excluding items, the company earned 44 cents per share. On
that basis, analysts had been expecting earnings of 25 cents a
share, according to Thomson Reuters I/B/E/S.
Revenue rose 14 percent to $657.1 million. Analysts expected
revenue of $589.4 million.
SunPower's stock is up 466 percent so far this year.