SunPower posts 70% drop in third-quarter profit

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California-based SunPower Corp. on Wednesday posted a 70% drop in third-quarter net profit while revenue in the period reached $663 million, an increase of nearly 1% compared to the same period a year ago.

The drop in net income was attributable to a number of factors, including $14.4 million in charges related to a stock-based compensation expenses, non-cash interest expenses, tax effects, the timing of revenue recognition from utility and power plant projects and other expenditures.

Nevertheless, SunPower President and CEO Tom Werner offered an upbeat assessment: "Our third-quarter results reflect another strong quarter of execution, driven by significant demand for both distributed generation and power plant systems."

Regionally, North America remained the company’s biggest market. Werner said. “Construction of the 579 MW-ac Solar Star Projects for MidAmerican Solar is on plan with 309 MW now connected to the grid. Construction of our 135 MW Quinto project is proceeding and we recently closed financing for the project, consistent with our holdco strategy,” Werner noted.

The company continues to see strong demand in the commercial sector, booking more than 20 MW of power purchase agreements (PPAs), including a 16 MW ground-mounted solar project for the University of California at Davis. It also signed a 10 MW expansion agreement with Verizon.

On the residential side, third-quarter bookings were up more than 50% sequentially.

In Europe, the Middle East and Africa, SunPower “saw stable pricing against the backdrop of an evolving distributed generation market environment and continue to adapt our go-to-market plans accordingly,” Werner added.

The company also won a a four-project, 41 MW supply agreement for Compagnie du Vent, a subsidiary of French utility GDF SUEZ in connection with the recent French national tender program. Werner said the company would achieve its goals for the EMEA region in view of the French supply agreement and other booked power plant projects, including the construction start of an 85 MW project in South Africa.

Japan remained the key driver in SunPower’s Asia Pacific business, accounting for 28% of total shipments in the third quarter. In China, the company expects to install more than 30 MW of power plant systems by the end of the year. “With strong positions in both Japan and China, we expect Asia Pacific to continue to be a major market for SunPower going forward,” Werner added.

The chief exec also noted the fact that SunPower produced its one billionth solar cell, representing a cumulative output of more than 3 GW.

Looking forward, the company expects full-year revenue of $2.535 billion to $2.585 billion, gross margin of 20% to 21% and net income per diluted share of $0.95 to $1.10.

SunPower will provide the company’s fiscal year 2015 outlook at its Analyst Day to be held on November 13 in New York City.

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