SunPower reports strong Q4 results, plans company-wide expansion

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SunPower reported its fourth quarter and full year 2015 results today, and the results look very different if you look at them from general accounting standards or SunPower’s “non-GAAP” approach.

This should not be surprising given SunPower’s strong presence in supplying and building utility-scale solar projects, which tends to mean wild variations in quarter-to-quarter revenues.

According to generally accepted accounting principles (GAAP), SunPower’s revenues fell 68% year-over-year to $374 million, with a net loss of $128 million. However, SunPower notes that GAAP rules “push forward” revenue recognition for utility-scale projects due to the use of real estate accounting rules for these plants.

On a non-GAAP basis, SunPower claims $1.36 billion in revenue, more than double the fourth quarter of 2014. The company attributes over $1 billion in non-GAAP revenue to its power plant business, which includes completion and sale of the 135 MW Quinto project. SunPower claims an EBITDA of $380 million as well as $270 million in Non-GAAP net income.

In a call accompanying its quarterly results SunPower was quite bullish on its future business. In July SunPower bought a 1.4 GW pipeline of projects from developer Infigen, which CEO Tom Werner says “positions us very well for development between 2017 and 2020”.

This is in part due to the unexpected extension of the Investment Tax Credit (ITC) for solar through 2019 shortly before Christmas. And if there is any question about its ability to fund additional project development, SunPower notes that it is sitting on nearly $1 billion in cash, as well as a revolving fund.

The company is also dropping projects into 8point3 Energy Partners, the joint yieldco which it operates with First Solar. The approach of 8point3 is considered more conservative than other yieldcos in the renewable energy space, and the company currently has right of first offer on around 300 MW of SunPower assets, most of which is under construction.

SunPower also has 1.07 GW of assets and future assets in its Holdco, roughly 2/3 of which are utility-scale.

SunPower estimates that its pipeline has now grown to over 14 GW, 4.1 GW of which is located in the Americas. On the production side, as the company reports that it was making full use of existing module capacity in Q4, it is beginning to ramp production at its Fab 4 facility in the Philippines.

To feed its growing utility-scale, residential and commercial businesses, SunPower is planning to turn out more modules. “The time is right for SunPower to aggressively expand our production and market share,” stated CEO Werner on the results call.

This includes plans to expand its production to 4 GW annually by 2019, including completion of its Fab 5 facility. SunPower expects nearly half of its capacity in 2019 to be dedicated to its P-Series PV modules, which incorporate technology acquired with its purchase of Cogenra.

SunPower began ramping production of its P-Series in Q4. The modules feature a novel approach to stringing cells in an overlapping pattern with no busbars. These P-Series modules are particularly targeted for markets in the developing world, and SunPower notes that P-Series production requires lower CAPEX on a per-watt basis.

SunPower plans for its production to be “increasingly be bundled into complete solutions”. This includes its Oasis Power Block for the utility-scale market, and its recently rolled-out Helix product for ground-mounted, carport and rooftop projects in the commercial market.

In 2016, SunPower additionally plans to unveil a new product for the residential market which will incorporate microinverters, integrated monitoring and energy storage.

SunPower expects its business to slow somewhat in the first quarter of 2016, with non-GAAP revenue of $290-$340 million, and EBITDA of $0-25 million. Over the full year 2016 the company is guiding non-GAAP revenue of $3.2-$3.4 billion, and $450-$500 million in EBITDA.

GAAP figures are significantly less optimistic, with SunPower expecting only $2.2-$.24 billion in revenues, and $0-$50 million in net income.