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SunPower posts strong Q4 and fiscal year earnings, looks to consumer rentals in Q1 2014

By Emiliano Vazquez | 12 Feb 2014

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(Image courtesy of SunPower Corporation)

(Image courtesy of SunPower Corporation)

SAN JOSE, Calif. — SunPower Corporation (NYSE: SPWR), one of the leading manufacturers of high-efficiency consumer solar panels in North America, announced financial results Wednesday for both the fourth quarter and fiscal year of 2013. Chief Executive Officer and President Tom Werner cited sustained demand across diverse sectors as a key factor in SunPower’s strong Q4 report.

The San Jose-based firm has been praised by sector analysts for its diverse array of revenue generators; with a strong presence in the overseas market and a well-saturated domestic demand, SunPower is one of several clean energy corporations benefitting from a renaissance in clean tech stocks.

Analysts predicted a strong fourth quarter in the wake of an equally strong third, as a burgeoning revival of the photovoltaic market swept sector stocks upward. Research institutes are calling the resurgence a “second gold rush,” after a slump that crashed the market in 2011-2012.

The company reported fourth quarter net income of $22.3 million, or 15 cents per share, compared to a loss of $144.8 million, or $1.22 per share, for the fourth quarter of 2012. It reported revenues of $638.1 million, down from the $678.5 million reported year over year.

Non-GAAP revenues for Q4 were $758 million, a net year-over-year decrease of $26.4 million that ran counter to analysts’ expectations. Non-GAAP earnings per share for the fourth quarter totaled 47 cents, beating analysts’ expectations of 28 cents per share.

Fiscal year non-GAAP revenues were $2.6 billion, on par with 2012’s $2.6 billion. Fiscal year non-GAAP earnings per share were $1.68, a net year-over-year increase from 2012’s 18 cents per share earnings.

Non-GAAP gross margins remained relatively constant across geographical regions, with the exception of the EMEA — or Europe/Middle East/Africa region — which saw a year-over-year jump from a 49.1 percent loss in the fourth quarter of 2012, compared to 16.4 percent for the fourth quarter of 2013. This was partially due to solar developments in Israel during 2013.

“We achieved our year-end profitability goal in the EMEA region as we benefitted from increased revenue and margins due to a strong rebound in our rooftop business in Europe, as well as the sale of one of our power plant projects,” Werner said in a statement.

The APAC — or Asia-Pacific region — saw a non-GAAP gross margin year-over-year decrease from 22.2 percent to 16.2 percent, but Japan continued to maintain its hold on SunPower’s business, accounting for 24 percent of all shipments.

Non-GAAP operating expenses for the fourth quarter were $82.2 million, a year-over-year decrease of $6.6 million. Non-GAAP operating expenses for the fiscal year were $293.1, a year-over-year decrease of $15.6 million. Both sets of numbers corroborate executive assertions that SunPower’s increased operating efficiency will continue to be a trend.

Looking forward, SunPower is aiming to expand its range of leasing options in order to compete more effectively in the North American domestic market. Thought analysts see potential for growth due to SunPower’s higher-efficiency panels; but they still trail market leaders like SolarCity by substantial margins.

The company said it expected revenues for the first quarter of between $650 million and $700 million, and earnings per share of 25 cents to 40 cents. For 2014, the company anticipated revenues of $2.4 billion, and earnings per share of between $1 and $1.30, below analysts’ estimates of $2.63 billion and $1.18 per share.

SunPower’s recent partnership with Bank of America is a step towards realizing the firm’s goals for alternative models of domestic solar panel leasing and loan programs.

“We were also pleased to extend our relationship with Bank of America as their scalable, proven platform will help us drive continued growth in our residential lease channel,” said SunPower Chief Financial Officer Chuck Boynton in a statement. “With the further monetization of our significant project pipeline, continued focus on expanding our global footprint and ability to optimize our cost and capital structure, we are well positioned to meet our goals for 2014.”

At the 4 p.m. close of trading on the New York Stock Exchange, shares of SunPower were up 50 cents from yesterday, closing at $31.62. Shares dropped to $30.12, or 4.7 percent, in after-hours trading.

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