Tag Archives: spwr

First Solar R&D ‘Paying Off,’ But Sales Remain ‘Uneven’: Argus

First Solar ‘s ( FSLR ) quarterly $31.5 million R&D spending average is starting to pay off, Argus analyst David Coleman said Wednesday, noting the No. 1 solar installer’s technology is becoming cost-competitive even without subsidies. Coleman rates First Solar stock a buy, but he slashed his price target to 66 from 90. Shares have pulled back 33% since hitting a 2016 high on March 18, as earnings last month missed Wall Street expectations. Over the past three months, First Solar stock has fallen 23.1% vs. a 6.8% gain in the S&P 500. But midday on the stock market today , First Solar stock was up nearly 2%, near 50. Shares of top rival SunPower ( SPWR ) were up a fraction, trailing IBD’s 20-company Energy-Solar industry group, which was higher by close to 2%, above 27, after touching a three-year low of 25.86 on May 10. The group ranks just No. 180 out of 197 groups tracked by IBD. First Solar stock was slammed on the company’s $100 million Q1 sales miss last month. Then, the firm announced CFO Mark Widmar would succeed CEO James Hughes, effective July 1. Hughes will join the board. But that sales miss was largely due to the timing of project revenue recognition, Coleman wrote in his research report. Predicting quarterly sales for developers like First Solar and SunPower can be tricky. This month, SunPower’s Q2 sales view lagged by $400 million. “Overall, we remain optimistic about the company’s long-term earnings power; however, investors should expect First Solar’s financial results to be uneven on a quarter-to-quarter and year-to-year basis due to the timing of revenue recognition,” he wrote. First Solar Rides Cadmium Telluride R&D During Q1, cash declined 3.5% sequentially to $1.1 billion, but First Solar remains profitable “even as its peers have been hurt by oversupplied markets and a lack of pricing power,” Coleman wrote. It investments in cadmium telluride technology are starting to pay off. “We see evidence that First Solar’s technological investments are paying off, as they have enabled the company to lower the cost of solar generation on a per-watt basis and to expand its opportunity set of utility-scale projects,” he wrote. Cadmium telluride should provide a cost advantage vs. more commoditized solar module technology such as polysilicon, Coleman wrote. In some markets, it’s becoming cost-competitive even without subsidies — a tough goal for solar companies still largely dependent on governmental whims. By 2025, First Solar expects to have 40 gigawatts in North American utility installations, implying 21.9% growth. The company also has bookings in Turkey, Japan, Australia, India and Africa, Coleman wrote. First Solar should also benefit from stricter environmental regulations on fossil-fuel-based power, and from increased government and public support for solar. Last year, the U.S. Congress extended the Investment Tax Credit (ITC) on solar by five years, avoiding a cliff in 2017 installations. The biggest risk lies in First Solar’s dependence on utility-scale deployments, Coleman wrote. “If the market for utility-scale solar power generation does not expand significantly over the next few years due to cost factors or technological or political developments, First Solar would likely experience slower-than-anticipated growth,” he said.

SunPower Keeps Full-Year View Despite $400 Million Q2 Guidance Lag

Late Thursday, SunPower ( SPWR ) kept its full-year outlook despite offering Q2 guidance that lagged Wall Street’s view by $400 million, indicating a back-end-loaded 2016 for the No. 2 solar developer, says Credit Suisse analyst Patrick Jobin. SunPower and First Solar ( FSLR ) stocks were both flat in early afternoon trading on the stock market today , but IBD’s 26-company Energy-Solar industry group was down more than 1%, touching a three-year low for the third straight day. SunPower-First Solar yieldco 8point3 Energy Partners ( CAFD ) stock was down 2%. For Q1, SunPower reported $433.6 million in sales ex items, topping analysts’ model for $328.5 million, boosted by revenue recognized from the sale to 8point3 of the 50-megawatt Hooper Project. Solar firms form yieldcos to own their operating assets. But SunPower’s 30-cent loss per share ex items was wider than the 20-cent projection of 16 analysts polled by Thomson Reuters, and that swung from a 13-cent gain in the year-earlier quarter. SunPower said it deployed 236 megawatts in the quarter, above guidance for 180 MW to 210 MW and up 8% year over year. Of that, Jobin estimates 75 MW was residential, 35 MW commercial and 205 MW power plant. The latter two segments missed views for 43 MW and 210 MW. Residential deployments fell 23% on Japanese weakness, partially offset by 50% growth in the U.S. market, Jobin wrote. But lease bookings (37% of U.S. deployments) fell 18%. For the current quarter, SunPower guided to $310 million to $360 million in sales, down 11% year over year at the midpoint. That was far off the analysts’ model for $722 million. SunPower didn’t offer an earnings view, but the consensus expected 22% growth to 22 cents. During Q2, SunPower expects to deploy 360 MW to 385 MW. For the year, the company maintained its view for 1.6 gigawatts to 1.9 GW and $3.2 billion to $3.4 billion in sales “implying a second-half weighted year,” Jobin wrote. SunPower also shed light on 650 MW in projects. The lion’s share, 436 MW, will be completed in Q4. The project list includes 241 MW slated for sale to 8point3, 151 MW for third parties and 255 MW to be divvied up. The company also announced a $200 million revolver facility to focus on commercial and small-scale utility projects that will be able to fund up to 100% of construction projects. Jobin retained his outperform rating and 32 price target on SunPower stock, which was near 17 Friday afternoon.

SunPower Reports Q1 Loss; Sales Guidance Lags By $400 Million

Late Thursday, No. 2 solar developer SunPower ( SPWR ) reported Q1 sales that topped Wall Street estimates, but it also posted its first quarterly loss since Q1 2012, and its current-quarter sales guidance lagged Wall Street views by about $400 million. SunPower stock was down 1.5% in after-hours trading Thursday, after the company released its earnings. Shares fell 3.7% in Thursday’s regular session. Last week, top rival First Solar ( FSLR ) reported Q1 sales that lagged Wall Street by about $100 million. For Q1, SunPower’s $433.6 million in sales ex items topped the consensus of 16 analysts polled by Thomson Reuters, but a 30-cent per-share loss minus items was greater than expectations for a 20-cent per-share loss. On a year-over-year basis, sales were flat, and its bottom line swung from a 13-cent per-share profit ex items in the year-earlier quarter. Current-quarter non-GAAP sales guidance for $310 million to $360 million would be down 11% at the midpoint. That fell far short of analysts’ model for $722 million. SunPower didn’t offer an earnings view, but the analyst consensus calls for a 22-cent per-share profit.