SunPower Shares Up 5% As Q3 Results Top Estimates; Boosts 2013 EPS Outlook

(RTTNews) - Shares of SunPower Corp. (SPWR) rose nearly five percent in expended trading on Wednesday after the solar power products company reported results for the third quarter that topped analysts' expectations.

The company also posted a profit for the third quarter compared to a loss last year, reflecting lower operating expenses, significantly higher gross margins and a revenue growth. Looking ahead, the company raised its adjusted earnings guidance for the full-year 2013, while narrowing its annual revenue forecast range.

SunPower became a subsidiary of Total Gas & Power USA S.A.S. after French oil company Total SA (TOT, TTFNF.PK, TTA.L) made a $1.31 billion strategic investment in 2012 by acquiring a 60 percent stake in the solar panel maker.

"SunPower's third-quarter results reflect strong execution of our diversified downstream strategy, as global demand for our high efficiency systems in both our power plant and distributed generation channels remains robust. Operationally, we beat our cost reduction goals for the quarter while improving overall equipment effectiveness and average solar cell conversion efficiency," President and CEO Tom Werner said in a statement.

The San Jose, California-based company posted net income of $108.39 million or $0.73 per share for the third quarter, compared to a net loss of $48.54 million or $0.41 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $0.44 per share, compared to last year's $0.03 per share. On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.25 per share for the quarter. Analysts' estimates typically exclude special items.

However, revenues for the quarter edged up to $657.12 million, from $648.95 million in the same quarter last year. Meanwhile, adjusted revenue of $619.45 million came in above nine Wall Street analysts' consensus estimates of $589.38 million.

Total operating expenses for the quarter plunged to $79 million from $155 million in the prior-year quarter. Gross margin improved 1700 basis points to 29.4 percent, and adjusted gross margin expanded 500 basis points to 19.1 percent from last year.

Megawatts produced during the quarter totaled 313, compared to 227 in the year-ago quarter.

"Due to strong demand for our unique, cost effective, high efficiency products, we have made the strategic decision to expand our solar cell manufacturing capacity by more than 25 percent. SunPower's planned 350-megawatts (MW) expansion will produce our next generation, step-reduced cell technology with initial silicon starting in early 2015. This will bring our total cell capacity to more than 1.8-gigawatts (GW) when fully ramped," Werner added.

Looking ahead to the fourth quarter, the company expects adjusted earnings in a range of $0.15 to $0.35 per share, on projected adjusted revenues between $675 million and $725 million. Analysts expect the company to report fourth-quarter earnings of $0.28 per share, on quarterly revenues of $723.38 million.

For fiscal year 2013, the company raised its adjusted earnings guidance to a range of $1.30 to $1.50 per share from the prior forecast of $1.00 to $1.30 per share. However, the company narrowed its revenue outlook to between $2.52 billion and $2.57 billion from the prior projection of $2.50 billion and $2.60 billion.

Street is currently looking for full-year 2013 earnings of $1.23 per share on annual revenues of $2.53 billion.

SPWR closed Wednesday's regular trading at $31.85, down $1.37 or 4.12% on a volume of 4.81 million shares. The stock lost a further $1.58 or 4.96% in after-hours trading.