California solar panel maker SunPower was back in the black in the second quarter as production grew by 15% compared to a year ago.
The San Jose-based company posted a net profit of $19.6 million between April and June, up from a hefty $84.2 million loss in the second quarter of 2012, while revenue dropped 3.2% to $576.5 million year-on-year. SunPowers gross margin improved substantially at 18.7%, up from 12.3% in the same period last year and more than doubling from the first quarter of 2013.
"SunPower's strong results in the second quarter reflect solid operational execution, as well as continued demand for our high efficiency systems in both the power plant and distributed generation channels across all major geographies," said Tom Werner, SunPower president and CEO.
Werner added that the companys North American business remained "the cornerstone of our success." SunPower completed panel installation at the 250 MW California Valley Solar Ranch (CVSR) in San Luis Obispo County, with full project completion expected by year end, while construction continues on the 579 MW Solar Star Projects for MidAmerican Solar, which span more than 3,000 acres of land in Kern and Los Angeles Counties in Southern California.
"Additionally, we strengthened our position as the leader in the commercial market, booking $100 million in commercial projects in the second quarter," Werner said. "In the residential business, demand continues to be solid with $150 million in new lease capacity financing. SunPower is well positioned for success in the second half of the year."
Business in Japan buoyed operations in the Asia-Pacific region, SunPower's chief executive added. "In APAC, demand in the Japanese market continued to be strong as evidenced by our fourth quarter of record shipments. Our success in Japan reflects that our industry leading technology, reliability and quality remain distinct competitive advantages in this market."
Werner said the company was also seeing a turnaround in its European business as it recorded its third straight quarter of financial improvement. "With demand trends improving and stabilization in both industry conditions and pricing, we remain confident in our ability to achieve profitability in the EMEA region by the end of 2013," he added
In an interview with Bloomberg on Wednesday, Werner said the company is looking to increase its share in Asia, where the group saw sales double in the second quarter to $101.9 million from $48.2 million a year ago, due mainly to Japanese demand. SunPower estimates it controls some 10% of Japans residential panel market.
With business in the U.S. and Japan booming, the company is at full capacity and looking to increase production operations to meet growing global demand.
"The speed of international development is a sign of many positive things," Werner told Bloomberg. "When things turn on, they tend to turn on very quick, very fast."
Indeed, while SunPower is looking to expand, the rest of the international solar industry is struggling with oversupply and falling prices.
SunPower Chief Financial Officer Chuck Boynton said during a conference call on Wednesday that the company was considering expanding a production joint venture with Taiwanese electronics maker AU Optronics Corp or building a new fab.
SunPower and AU Optronics Corp teamed up in 2010 to build a $700 million, 1.4 GW solar cell plant in Malaysia.
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