SunPower confident on back of passable Q1 2012 results04. May 2012 | Industry & Suppliers, Markets & Trends | By: Becky Stuart
While the U.S.-based photovoltaics company continued to suffer losses in the first quarter (Q1) of 2012, its balance sheet showed some improvement on last year. There is still some way to go, though, before it is in the black. Issuing its full year (FY) guidance, SunPower is confident it can achieve revenues of US$2.6 billion to $3 billion, and reduce costs to $0.86 per Watt.
SunPower’s Q1 2012 financial results were a mixed bag, with some improvement recorded on the one hand, and significant losses seen on the other. For instance, moving in the right direction, albeit it slowly, the company saw a GAAP operating loss of $50.7 million, down from the $69.4 million seen in Q4 2011. Compared to Q1 2011, which saw a loss of $1.3 million, the damage was still significant in the last quarter, however. Its Q1 2012 non-GAAP operating loss, meanwhile, amounted to $6.1 million, compared to $5.1 million in Q4 2011, and an operating income of $21.2 million in Q1 2011.
In terms of GAAP net loss, Q1 2012 fell to $74.5 million, down from $93 million in Q4 2011, but up on Q1 2011, which saw a net loss of just $2.1 million. Non-GAAP net loss in Q1 2012 was $13.5 million, compared to a net income of $4.2 million in Q4 2011 and $14.4 million in Q1 2011.
Q1 2012 GAAP revenues saw a drop for SunPower from the previous quarter, from $625.3 million to $494.1 million. They were up on Q1 2011, however, which achieved $451.4 million. Q1 2012 non-GAAP revenues, on the other hand, reached $580.1 million, compared to $811.1 million in Q4 2011, and $451.4 million in Q1 2011. Of this, the Americas reaped the most sales, followed by EMEA and APAC.
Compared to many of its peers, SunPower recorded a relatively healthy GAAP gross margin of 9.2 percent in Q1 2012, compared to the 6.8 percent achieved in Q4 2011. It was still significantly down from the 19.6 percent seen in Q1 2011. Meanwhile, non-GAAP gross margin was 12.7 percent in Q1 2012, compared to 11.3 percent in Q4 2011, and 20.3 percent in Q1 2011.
GAAP operating expenses in Q1 2012 were $95.9 million, compared to $111.7 million in Q4 2012, and $89.8 million in Q1 2011. Non-GAAP operating expenses in Q1 2012 also fell from Q4 2011, from $96.9 million to $79.6 million. They were slightly up on Q1 2011, however, which recorded operating expenses of $70.5 million.
Overall, SunPower sold 297 megawatts (MW) of solar products in Q1 2012, compared to 261 MW in Q4 2011, and 184 MW in Q1 2011.
Commenting, Tom Werner, president and CEO, said, "Operationally, we met our manufacturing cost targets for the quarter as we further implemented our step reduction program in our Fab 2 cell fabrication plant and started full commercial production of our Maxeon Gen 3 cell technology with efficiencies of up to 24 percent.
"With the continued execution of our downstream strategy, growing partnership with Total and focus on reducing our operating expenses, we remain confident in our ability to successfully manage through the current industry transition while structuring the company for long-term growth and industry leadership."
Looking ahead to Q2 2012, SunPower is targeting consolidated non-GAAP revenues of $575 million to $650 million, and a gross margin of 12 to 14 percent. It is also looking to sell between 250 to 275 MW of solar products. On a GAAP basis, the company expects revenues of between $560 million to $635 million, and a gross margin of 11 to 13 percent.
For FY 2012, SunPower expects both GAAP and non-GAAP revenues to be between $2.6 billion to $3 billion, and MW recognized to be in the range of 900 to 1,200 MW. The company says it is also on track to achieve a $0.02 per Watt cost reduction through the consolidation of its Philippine factory. Meanwhile, it says that by the end of the year, it aims to meet its cost reduction plan of $0.86/W "on an efficiency adjusted basis".
With regards to its step reduction initiative, it says that there are currently two lines in place. Also by the end of 2012, it aims to have all 12 lines in Fab 2 converted. Meanwhile, in Milpitas, the company is said to be ramping up capacity to 24/7, due to the growth of the North American market.
In terms of its market strategy, SunPower is focusing on three areas: the Americas, EMEA (Europe, the Middle East and Africa) and APAC (Asia-Pacific). Specifically, it says there are emerging opportunities in the Middle East and Africa. Meanwhile, Japan, India, China and Australia are the four "major" APAC markets. It is taking a diversified approach to its markets, in order to stay competitive.
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