Some of the US’ top solar players appear to have largely weathered COVID-19’s impacts in Q1 2020 but are now expecting a setback in Q2 2020, judging by the recent flurry of financial updates.
The latest results of SunPower and Vivint Solar showed both scored relatively strong installation numbers in Q1 2020 but are now bracing for a deceleration in the second quarter, coinciding with the US’ rise to become the country worst-hit by COVID-19.
The bullish Q1, bearish Q2 dynamic – echoing the forecasts of top residential player Sunrun, which acknowledged last week it expects a “slowdown” in the coming quarters – was seen with SunPower’s roll-out figures for either quarter.
In its results, SunPower said it recorded 538MW in Q1 2020, a year-on-year jump on the 455MW posted in Q1 2019. In Q2 2020, however, the firm expects a dip to 340-400 MW, a figure below those posted in Q2 2019 (616MW), Q3 2019 (586MW) and Q4 2019 (707MW).
SunPower’s performance in recent quarters
|Q1 2019||Q2 2019||Q3 2019||Q4 2019||Q1 2020||Q2 2020 (guidance)|
|MW recognised||461MW||616MW||586MW||707MW||538MW||340-400 MW|
|MW shipped by SPT unit||448MW||637MW||677MW||792MW||580MW||—|
At US$449.2 million, SunPower’s revenues were up year-on-year in Q1 2020 but are expected by the firm to slip to US$290-330 million in Q2 2020. With Q1 2020 GAAP net losses of US$1.4 million, the group – which pre-COVID already predicted 2020-wide losses of US$145-195 million – is now anticipating to be US$100-120 million in the red in Q2 2020 alone.
The expectations of “material [COVID-19] impacts” extend to SunPower’s manufacturing business, with the spin-off to new listed entity Maxeon Solar set to complete this year. The firm saw a strong Q1 2020 on this front – with shipments growing 29% year-on-year, driven by distributed generation clients – but says impacts have started to bite in Q2 2020.
According to CEO Tom Werner, the idling of all PV factories worldwide in earlier months is slowly easing. Noting that the Performance-Series joint venture is “back to full production”, the executive said: “We expect our remaining facilities to resume production in the coming weeks and expect to have sufficient existing inventory to meet our commitments for the second quarter.”
SunPower sought to underscore its financial strengths in the face of the COVID-19 outbreak. CEO Werner pointed at the recent one-billion-dollar funding deal with Silicon Valley lender Tech CU, while CFO Manavendra Sial listed the efforts to deleverage throughout Q1 2020 and the plan to save up to US$100 million this year. SunPower, Sial said, believes it is “well positioned” for the future.
‘Good signs’ for Vivint’s Q3 after talk of Q2 roll-out hit
The forecasts of a more muted Q2 were too a takeaway from Vivint Solar’s financial results. The new update confirmed the group managed to install 56MW of solar systems throughout Q1 2020 – up 23% on Q1 2019 figures – but added, like SunPower, that a drop is expected in Q2 2020.
According to Vivint’s new guidance, Q2 2020 installations are set to fall within the 35-38MW range. Should the estimate come to pass, the bracket would take Vivint’s quarterly roll-out records (see below) to lows it has not experienced since at least 2017.
Asked by analysts to spell out how much of the 35-38MW has already secured permit approval, Vivint Solar CFO Dana Russell remarked: “We're nearly halfway through the quarter. We're on track. It's not like we're expecting some big spike at the end of the quarter to hit that guidance number. We feel like the flow of business has been reasonably consistent.”
Russell was then quizzed over the firm’s Q3 prospects. Stressing that Vivint Solar is not in a position to offer concrete numbers, the CFO said the group does expect higher installation volumes in 2020’s third quarter. “We're seeing good signs,” the executive said. “But it's a little early to tell in terms of what the possibilities are.”
Vivint Solar’s Q1 2020 update painted a mixed picture of its financial performance. Revenues grew 31% year-on-year to reach US$91.2 million, while gross profit climbed 37% to US$16.3 million. The firm – which posted net losses of US$423.3 million in 2019 – remained loss-making the past quarter, however, with losses reaching US$40.3 million in Q1 2020.
Vivint Solar used the update to restate its optimism for the upcoming quarters, however. Like his peer at Sunrun, CEO David Bywater pointed at the benefits from the virtual shift COVID-19 has turned into a necessity. April had been a “banner month” for digital leads, he said, adding that Vivint would use what it had learned during the crisis to bring down costs in the future.
Credit for story image on PV Tech's homepage: SunPower
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