October 30, 2018 / 10:33 PM / 16 days ago

SunPower cuts view as panel price drop sparks order delays

(Reuters) - U.S. solar company SunPower Corp (SPWR.O) on Tuesday lowered its 2018 forecast after some customers delayed equipment purchases due to a freefall in the market price of panels that was instigated by solar policy changes in top market China.

China’s move in May to slash subsidies for domestic solar installations unleashed a flood of low-cost Chinese-made panels onto the global market - pushing prices down more than 10 percent in a matter of weeks.

That has kept some project developers on the sidelines as they wait for prices to stabilize, SunPower said, adding that the situation would persist in the fourth quarter. The company expects those orders to happen in 2019, Chief Executive Tom Werner said on a conference call.

The delays impacted SunPower’s business that supplies equipment to solar project builders. In its primary distributed generation business, which includes residential and commercial systems, the company saw only “a slight decrease” in prices between the second and third quarters.

SunPower lowered its forecast for solar products deployed to a range of 1.45 GW to 1.55 GW from a prior view of 1.5 to 1.9 GW.

The company forecast 2018 revenue of $1.7 billion to $1.8 billion on a net basis, compared with a prior view of $1.6 billion to $2 billion. Adjusted earnings before interest, taxes, depreciation and amortization are expected to be between $100 million and $120 million, compared with a prior view of $95 million to $125 million.

SunPower is both a manufacturer of solar panels and an installer of solar power systems. The San Jose, California-based company makes its products primarily in the Philippines and Mexico but earlier this month closed on a deal to buy a panel factory in Hillsboro, Oregon.

That move was intended to help the company sidestep tariffs on overseas-made panels imposed by the Trump administration earlier this year. SunPower in September received an exemption from those tariffs for its premium imported panels. That exemption will not benefit the company financially until 2019, Werner said, adding that the company would record $20 million in tariff costs in the fourth quarter.

SunPower will begin production in Oregon in the first quarter of next year with a goal of manufacturing up to 150 MW of solar panels there in 2019.

SunPower shares were down 5.9 percent at $6.04 in after-hours trade on the Nasdaq. The company is majority-owned by France’s Total SA (TOTF.PA).

Reporting by Nichola Groom; editing by Grant McCool and Leslie Adler

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