SunPower first-quarter results edge toward profitability; company guides at least $2B for FY2010

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SunPower has come out with its first-quarter 2010 results, reporting revenues of $347 million for the period, which compares to $212 million and $548 million in Q1 and Q4 2009, respectively.  The company’s components segment accounted for 81% of the latest quarterly revenues, while the systems group pulled in 19% of the total.

On a GAAP basis, SunPower reported gross margin of 20.7%, an operating loss of $2.9 million, and net income per diluted share of $0.13 for the quarter, which compares to gross margin of 15.2%, an operating loss of $18 million, and a net loss per diluted share of $0.12 in Q109. 

On a non-GAAP basis, the company showed a total gross margin of 22.5%, with operating income of $13.5 million and net income per diluted share of $0.05—in line with the company’s previous guidance for the quarter. 

As for the remainder of FY2010, SunPower has reaffirmed its non-GAAP and GAAP guidances, projecting revenues of $2 billion to $2.25 billion, with more than $900 million backloaded into the fourth quarter.

The company also expects capital expenditures of $375 million to $475 million, as Fab 3 in Malaysia ramps and enters initial production in the fourth quarter. Solar-cell production will reach approximately 550MW, with another 50-100MW of cells coming from third-party suppliers, according to the company.

SunPower said it will increase factory line productivity by 15% this year, through a combination of improvements in cell efficiencies, overall equipment effectiveness, and manufacturing yields. Panel costs will be reduced in line with its assumption of 20% lower module ASPs during the year.

It also announced that its Gen 3 cell technology, which will reportedly achieve minimum efficiencies of 23%, will debut in 2011.

SunPower CEO Tom Werner made the following statements about the latest company results.

“Our European residential and commercial business is growing rapidly and we continue to maintain our leading share of U.S. installed systems. With the completion of our SunRay acquisition, we are constructing more than 100MW of power plants in Europe and expect to monetize these projects, along with our previously completed Montalto power plant, by the end of 2010.

“In the U.S., we are on track to begin shipments in the second half of 2010 under our five-year, 200MW (DC) rooftop supply agreement with Southern California Edison. We also secured an incremental 40MW power purchase agreement with Pacific Gas and Electric, bringing our contracted capacity at California Valley Solar Ranch to 250MW.

“With our steady and diversified residential and commercial business, as well as our contracted utility and power plants business, we have very high confidence in our ability to meet our 2010 plan and deliver strong growth in 2011.

“Since all of SunPower’s high-efficiency solar panels, including our new E18 Series and E19 Series, are fully allocated in our 2010 bookings forecast, we have increased our access to third-party supply to meet demand.

“We also announced today our new SunPower Oasis Power Plant product, the industry’s first modular solar power block that scales from 1MW distributed installations to large central station power plants. SunPower Oasis expands our utility and power plant business opportunities providing our partners a cost-effective way to rapidly deploy fully integrated, utility-scale solar by streamlining the development and construction process.

“We are also accelerating our panel and system cost reduction plans as well as continuing to invest in research and development to lower capital expenditures per watt, improve return on invested capital and manufacturing performance metrics,” he concluded.

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