SunPower Blasts Q4 Views; But Q1, 2016 Outlooks Lag Wall Street

By | February 17, 2016

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No. 2 solar installer SunPower ( SPWR ) smashed Wall Street’s Q4 expectations late Wednesday but guided to Q1 sales that halved analyst views. SunPower stock seesawed in after-hours trading, trending up a fraction, having risen 2.2% in Wednesday’s regular session. Shares closed 2015 up 16% for the year, topping IBD’s 23-company Energy-Solar industry group, which ended the year up 1%. For Q4 ended Jan. 3, SunPower reported $1.36 billion in sales ex items and $1.73 earnings per share minus items, up 124% and 563%, respectively, vs. the year-earlier quarter. The company pulled in $900 million alone after completing its 135-megawatt Quinto commercial project in Merced County, Calif., CFO Chuck Boynton told analysts during the late Wednesday conference call. Power plants accounted for 77% of Q4 sales. Both sales and EPS ex items topped the consensus model of 16 analysts polled by Thomson Reuters for $1.27 billion and $1.52. Three months ago, SunPower guided to $1.25 billion-$1.3 billion in sales. During Q4, SunPower deployed 280 MW, down 10% vs. the year-earlier quarter but in line with its guidance for 275 MW to 305 MW. Among those deployments, SunPower counts a 100-MW project for Nevada’s NV Energy and a 36-MW project for Mexican airport Aeropuertos Del Sureste. And China remains a solar bright spot, SunPower CEO Tom Werner said on the call. Regulations and subsidies have helped China lead the world in terms of solar installations. “Demand in China remains robust,” he said. “We are committed to the Chinese market as a long-term driver of growth.” Q1 Sales Ex Items Guided To Fall 27% SunPower wrapped up the year with $2.6 billion in sales ex items and $2.17 EPS minus items, flat and up 63%, respectively, vs. 2014. That beat respective consensus views for $2.53 billion and $1.97. In November, SunPower guided to $2.5 billion to $2.55 billion in sales ex items. SunPower doesn’t give EPS guidance. The company deployed 1.15 gigawatts in 2015, touching the bottom line of its guidance for 1.15 GW to 1.18 GW. Current-quarter and 2016 views lagged the consensus. For Q1, SunPower guided to $290 million to $340 million in sales ex items, which would be down 27% at the midpoint. Wall Street expected $675.7 million in sales ex items and 33 cents EPS minus items. SunPower expects to deploy 315 MW to 340 MW in Q1, up from 266 MW in the year-earlier quarter. For the year, SunPower guided to $3.2 billion to $3.4 billion in sales minus items, missing the consensus model for $3.42 billion. Analysts expect $1.60 EPS ex items. Guidance for 1.7 GW to 2 GW deployed in 2016 would narrowly top the 2015 metric. Werner credited cost reductions, scaling and innovations, and regulatory support for “a landmark year” for the solar market in 2015. In late December, Congress voted in a five-year extension to the Investment Tax Credit on solar energy. The ITC was originally set to expire Dec. 31, 2016, prompting a 2017 “cliff” in installations. Also in 2015, Obama unveiled his Clean Power Plan with the goal of reducing carbon emissions by power plants, and 196 countries pledged to cut carbon emissions during a Paris climate summit. To capture share, SunPower is planning to heighten investments in the U.S., where solar is expected to account for only 3% of total power generation by 2020, Werner said. “We expect the five-year (ITC) extension should drive acceleration through 2020,” he said. “The scale of demand in the U.S. is huge, and we are planning to increase our spending here in the near term.” Canadian Solar Tops Views First Solar ( FSLR ) leads SunPower as the No. 1 solar company, with a $6.4 billion market cap to SunPower’s $3.2 billion. Together, the two formed yield company 8point3 Energy Partners ( CAFD ) last August. Canadian Solar ‘s ( CSIQ ) late Tuesday preannounced some results, posting Q4 sales and total solar module shipments that busted Wall Street expectations, FBR analyst Carter Driscoll wrote in a research report. Canadian Solar expects to report $1.02 billion to $1.07 billion in Q4 sales vs. analyst forecasts for $930 million to $980 million, Driscoll wrote. The company also upped its Q4 shipments guide to 1.35 GW to 1.4 GW, up 4% at the midpoint vs. earlier views. For 2016, Canadian Solar sees total shipments hitting 4.63 GW to 4.68 GW vs. prior expectations for 4.15 GW to 4.2 GW, and $3.35 billion to $3.4 billion in sales. Earlier views were for $3.28 billion to $3.33 billion. Canadian Solar stock jumped 18% Tuesday on that news, but they fell a fraction Wednesday. Scalper1 News

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