(Reuters) - U.S. solar company SunPower Corp (SPWR.O) reported a smaller-than-expected loss on Tuesday but forecast second-quarter earnings below analysts’ estimates.
Shares of the company were down 7.2 percent at $6.60 in after-market trading after closing at $7.11 on the Nasdaq. The stock had rallied more than 3 percent before the announcement.
A global glut of solar panels has pushed prices down substantially over the last year, harming profit margins for manufacturers and developers like SunPower. The company has been working to cut costs and preserve cash as it navigates the weak pricing environment.
In a vote of confidence for the company, SunPower said its majority owner, France’s Total (TOTF.PA), had agreed to guarantee up to $100 million of its $300 million credit revolver facility through August of 2019.
SunPower Chief Executive Tom Werner said the guarantee by Total would enable the solar company to invest confidently in new technologies such as energy storage or next-generation modules.
“It allows us to have insurance for our long term cash forecast,” Werner said in an interview.
SunPower forecast a second-quarter loss of $135 million to $110 million, bigger than analysts’ average estimate of $101.2 million, according to Thomson Reuters I/B/E/S.
Raymond James analyst Pavel Molchanov blamed a shift in the timing of the sale of some of SunPower’s Chilean projects to the end of the year for the disappointing second-quarter forecast.
“This is a project developer which means there is always complexity with revenue recognition,” Molchanov said.
The company, which makes solar panels and builds everything from residential rooftop installations to large, utility-scale solar power systems in the United States and abroad, has posted its seventh consecutive loss, on a GAAP basis.
SunPower said its net loss attributable to shareholders widened to $134.5 million, or 97 cents per share, in the first quarter ended April 2, from $85.4 million, or 62 cents per share, a year earlier.
Excluding items, the company lost 36 cents per share, while analysts on average had estimated a loss of 51 cents, according to Thomson Reuters I/B/E/S.
Total revenue rose 3.7 percent to $399.1 million. Total cost of revenue rose to $430.0 million from $333.3 million.
Reporting by Ahmed Farhatha in Bengaluru and Nichola Groom in Los Angeles; Editing by Shounak Dasgupta and Phil Berlowitz