The past year has been a brutal one for solar companies. Capital dried up, as did demand for solar goods. Prices dropped while inventories grew. But if SunPower’s earnings are any indication, some solar companies are weathering the harsh market in ways that can still turn a profit.
SunPower’s stock surged 20 percent in after-hours trading Thursday after posting earnings that, while down from a year earlier, showed strong improvement over the previous quarter and was well above what analysts were expecting.
In the three months ended June 28, SunPower’s revenue fell 22 percent to $297.6 million from the same quarter in 2008, but grew 39 percent from the previous quarter. Net income totaled 26 cents a share, compared with a profit of 37 cents a share a year earlier and a net loss of 6 cents a share in the first quarter.
Excluding one-time items, SunPower’s profit was 24 cents a share, which was well above the 15 cents that analysts had been expecting. Its revenue in the quarter was 14 percent above the $261 million forecast by analysts. That stronger-than-expected performance pushed SunPower’s shares up 20 percent in after-hours trading to $29.71.
The company also boosted its guidance for the full year. While revenue guidance changed little, the company said it expects GAAP profit to be between 45 cents and 90 cents a share. Previously, it had expected a range of 25 cents to 75 cents.
In a call with analysts, CEO Thomas Werner said that the company added 100 global dealers in the quarter, bringing the total to 600, and that its share in the California solar market grew to more than 30 percent from 25 percent in the previous quarter. SunPower also reduced inventory by $80 million, or 23 percent, and lowered its average selling price by less than 10 percent in the second quarter, Werner said.
Other solar shares were up in after-market trading. First Solar and Suntech Power were both trading 5 percent higher. While it’s still early to be declaring that the worst is over for solar companies, SunPower’s earnings seem to be generating a sense that things aren’t as bad as expected, and that companies with strong management may eventually emerge from the recession battered, but positioned for growth.
{"source":"https:\/\/gigaom.com\/2009\/07\/23\/sunpowers-strongish-forecast-lifts-up-solar\/wijax\/49e8740702c6da9341d50357217fb629","varname":"wijax_66985dd71dfd39424d199aac78549fde","title_element":"header","title_class":"widget-title","title_before":"%3Cheader%20class%3D%22widget-title%22%3E","title_after":"%3C%2Fheader%3E"}