Major PVEP SunPower reported higher GAAP revenue in the third quarter than previously guided due to increase sales in the US that offset weakness in Japan and Europe.
SunPower reported third quarter GAAP revenue of US$662.7 million, up from US$507.9 million in the previous quarter. The company had guided revenue of being in the range of US$575 million to US$625 million.
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Revenue (non-GAAP) generated in the Americas increased from us$446.3 million in the second quarter of 2014 to US$559.3 million in the third quarter, while revenue was down in EMEA and APAC regions.
Tom Werner, SunPower president and CEO said, “Regionally, North America was once again the biggest contributor. Construction of the 579-megawatt (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. We also continue to see strong demand in the commercial sector as we booked more than 20-MW of power purchase agreements (PPA); including a 16-MW ground mounted solar project for the University of California at Davis. When complete, our UC Davis system will be the largest solar power plant on any U.S. University or college campus. These commercial system PPAs are also structured in a way that is consistent with our holdco strategy. We also added both new and repeat cash customers to our commercial backlog including a 10-MW expansion agreement with Verizon. In the residential channel, third quarter bookings were up more than 50 percent sequentially as customers continued to choose SunPower for their solutions to take advantage of our quality, performance and flexible financing options.”
However, the APAC region that is predominantly Japan for SunPower, generated non-GAAP revenue of US$100.3 million in the third quarter, down from US$110.1 million in the previous quarter. EMEA, predominantly EU countries generated non-GAAP revenue of US$44.6 million, down from US$64.7 million in the previous quarter.
Last week, PV module producer REC Solar noted softness in sales to Japan and Europe for the same quarter, citing seasonality for Europe and a weak buying period in Japan.
“In EMEA, we saw stable pricing against the backdrop of an evolving distributed generation market environment and continue to adapt our go-to-market plans accordingly. In the power plant channel, we were awarded 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. With this supply agreement and our booked power plant projects, including the construction start of our 85-MW project in South Africa this quarter, we are confident in achieving our goals for this region,” added Werner.
PV Tech had previously highlighted a number of utilities in Japan had withdrawn grid connection access to PV power plant projects not already given connection approvals.
“Japan remained the key driver of our Asia Pacific business, accounting for 28 percent of total shipments in the third quarter,” noted Werner. “The very strong demand we see from Japan is a testament to the competitive advantage of our high efficiency technology in area-constrained sites and rooftops. In China, we continued to expand our activities through our SunPower C7 Tracker (C7) joint venture and expect to install more than 30-MW of C7 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.”
Guidance remains the same
Despite small variations in regional demand, the US remains SunPower’s major market, representing 79% of non-GAAP revenue in the third quarter.
Having been capacity constrained throughout 2014, SunPower has had little room to generate higher shipments and revenue than previously forecasted.
Not surprisingly, full-year GAAP and non-GAAP revenue guidance remains the same as previous guidance. The company reiterated an almost similar range of non-GAAP revenue of US$2.58 billion to US$2.63 billion, with gross margin of 19% to 20%.
On a GAAP basis, the company expects full year revenue of US$2.535 billion to US$2.585 billion, with gross margin of 20% to 21%.
However, fourth quarter 2014 guidance could be boosted by a potential timing benefit of approximately US$450 million in revenue that is related to the real estate accounting treatment of its 579MW Solar Star projects, according to the company.
Excluding the potential gain, SunPower expects fourth quarter non-GAAP revenue of US$575 million to US$625 million.
Capital expenditure in the quarter more than doubled to US$25.2 million, up from US$11.5 million in the previous quarter. However, capex for the year remained the same at US$150 million to US$170 million and recognized GW shipments in the range of 1.26GW to 1.3GW, effectively at 100% capacity.