LOS ANGELES (Reuters) - Solar power company SunPower Corp posted better-than-expected earnings and raised its forecast for the current quarter and year on strong demand in both its rooftop and power plant businesses, pushing the company’s shares up more than 6 percent.
SunPower, which makes solar panels that turn sunlight into electricity and also builds solar power systems, said its order books are already full for the year due to a pipeline of projects in the United States and Italy.
“We see more demand for our products than we can supply,” Chief Financial Officer Dennis Arriola said on a conference call with analysts.
Fourth-quarter net income was $152.3 million, or $1.44 per share, compared with $8.5 million, or 9 cents, a year ago.
Excluding one-time items, earnings per share of $1.36 easily topped the $1.05 per share that analysts had forecast, according to Thomson Reuters I/B/E/S.
Revenue rose 71 percent to $937.1 million from $547.9 million last year, higher than the $931.4 million that Wall Street expected.
The solar industry relies on renewable energy subsidies to spur demand while manufacturers work to bring the cost of generating power from the sun in line with that from fossil fuels. Investors have worried that a decline in government support in key solar markets like Germany and Italy will lead to an oversupply of solar panels in the market this year.
Italy accounted for about a third of SunPower’s business last year, but executives said that would fall to below 25 percent in 2011.
“Italy plays a less significant role for us this year than last year, and that is on purpose,” Chief Executive Tom Werner said.
Nevertheless, the San Jose, California company hiked its first quarter revenue forecast by $25 million to $475 million to $525 million. It also lifted its forecast for earnings per share, excluding items, to a range of 15 cents to 21 cents from the 12 to 20 cents range forecast it had issued in November.
SunPower’s high efficiency panels typically sell at a premium to its Chinese rivals, who have rapidly increased their production and are winning market share in renewable markets in Europe and the United States.
Concerns about that competition have helped push SunPower shares down 13 percent in the last year, but the U.S. company has moved to expand its output and its network of dealers, which will reach 2,000 in 11 countries this year.
SunPower said it is on track to reduce its costs to less than $1 per watt by 2014. Its fourth quarter cost per watt was $1.71.
Like competitor First Solar Inc, SunPower has moved into the engineering and construction market for solar power plants. That business has lower profit margins than selling modules to distributors and other project developers, but creates a direct channel for the company’s growing output of solar equipment and gives SunPower more certainty around pricing.
SunPower raised its 2011 earnings per share outlook to between $2 and $2.20, before one-time items. It had previously forecast earnings of $1.75 per share to $2.05 per share. Revenue is expected to be between $2.8 billion and $2.95 billion, up from a prior view of $2.65 billion to $2.85 billion.
SunPower shares were up 6.7 percent at $18.60 per share in post-market trading after gaining 1.7 percent during the regular session.
Additional reporting by Matt Daily in New York; editing by Gunna Dickson, Bernard Orr