SunPower cuts PV production costs 20% in 2013 but capacity and revenue constrained in 2014

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Major PVEP (PV energy provider), SunPower Corp said that it reduced production costs by more than 20% in 2013, following-on from a greater than 20% reduction achieved in the previous year.

The company said that all its manufacturing lines remained at full-capacity on the back of continued strong demand for utility-scale and residential markets.

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Tom Werner, SunPower president and CEO said, “Demand remains strong in both our power plant and distributed generation businesses, and we are executing well in our manufacturing operations with all solar cell fabrication facilities running at full capacity.  Our technology and operations teams continue to drive down panel cost as we reduced our annual costs by more than 20 percent for the second year in a row.  Additionally, our new 350-megawatt Fab remains on track and we expect first silicon production in less than 12 months.”

The company produced 317MW of solar cells in the fourth quarter, up slightly from 313MW in the previous quarter and was a new record level for the company. Total annual production reached 1,134MW, compared to a nameplate capacity of 1,200MW.

The company highlighted that its new 350MW manufacturing plant in the Philippines was on track to for first “silicon production in less than 12 months.” However the facility is not expected to produce its 23% ‘X Series’ modules until 2015.

The company still expects nameplate capacity to reach 1,500MW in 2015 and 1,700 in 2016.

Financial results

SunPower reported fourth quarter, 2013 GAAP revenue of US$638 million, compared to US$657.1 million in the previous quarter. Gross margin was 20.5%, down significantly from 29.4% in the previous quarter.

The company generated an operating income of US$36.7 million, down from US$114 million in the third quarter of 2013. GAAP net income in the quarter was US$22.3 million and US$95.6 million for the full-year.

SunPower reported full-year 2013 GAAP revenue of US$2,602 billion.

The company guided first quarter 2014 GAAP revenue of US$575 million to US$625 million, with gross margin of 18% – 20%.

The full-year 2014, SunPower guided revenue on a GAAP basis of US$2.45 billion to US$2.65 billion, with gross margin of 20% – 22%.

Capacity constrained, Sunpower revenue generation gain is based on slightly higher margins expected for the year.

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