SunPower sales reach record US$2.31 billion but losses reach US$603 million

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

In the fourth quarter of 2011, SunPower benefited from PV power plant project execution and its US-based residential leasing program that supported GAAP revenue of US$563 million, compared to US$705 million in the third quarter of 2011.Full-year record revenue was US$2.31 billion, up from US$2.2 billion in 2010. SunPower said it reduced production to better manage inventory build. The company is targeting overall production cost reductions of 15% in 2012, while production of its Maxeon Gen 3 solar cell with up to 24% conversion efficiency entered production. GAAP net loss in the fourth quarter was US$83.1 million and full-year loss was US$603 million.

Cost reduction roadmap

SunPower’s management noted in a conference call to discuss financial results that is was targeting further manufacturing cost reductions in 2012, designed to reduce costs by a further 15%. Management claimed that on an efficiency adjusted basis manufacturing cost per watt declined to US$0.86 in the fourth quarter, down from US$1.08 in the third quarter. 

The company noted that it had one production line transitioned to its lower cost programme, which had provided lower cell process costs of 15%. Technology updated lines represented 40% of all of SunPower’s production lines at the end 2011.

SunPower also announced that it was launching its Maxeon Gen 3 solar cell with up to 24% conversion efficiency having entered production in the fourth quarter. The higher cell efficiencies will enable SunPower to initially produce modules with 21% efficiency with plans to introduce 22% efficient modules later. When fully ramped, the Maxeon cell is expected to support its cost reduction efforts, according to management.

“We finished the year with a better than expected fourth quarter, as demand for SunPower’s differentiated technology sold through our diversified downstream channels enabled us to reach annual records in both revenue and shipments,” said Tom Werner, SunPower president and CEO.  “Operationally, we achieved both our panel production cost target and accelerated manufacturing step reduction program milestones.  Research and development investment results included initial volume production of our Maxeon Gen 3 next generation cell technology with a maximum cell efficiency of 24 percent.  As the market transitions, the companies with the strongest balance sheets will gain share.  Our strategic partnership with Total SA solidifies SunPower as one of the leading companies in the industry today. 

Production

SunPower said it had produced 922MW of cells in 2011, compared to 584MW in 2010. However, 766MW was recognised in revenue, though was up 40% from 546MW in 2010. Production in the fourth quarter was said to have reduced in the fourth quarter in order to manage high inventory levels that had risen in the year.

Management said that it had improved inventory turns to 6.6x from 5.9x in the third quarter and reduced inventory from US$425 million in the previous quarter to US$397 million at year end.

Capital expenditures for the quarter were US$46 million and US$131 million for the full year and first quarter CapEx was guided between US$45 million and US$55 million. Management noted that about 50% of the CapEx budget in 2012 would target manufacturing cost reductions. 

Project pipeline

The Utility and Power Plant (UPP) business generated non-GAAP revenue of US$377 million in the fourth quarter, up 16% over the third quarter. Non-GAAP gross margin for UPP also improved in the quarter to 17.2% from 12.6% in the third quarter of 2011.

Management noted that its UPP segment had 85% of forecast projects for the year already booked, which included the CVSR project and deal with NRG for 54MW.

“Our Utility and Power Plants (UPP) business continued to outperform as we met our project commitments and began major construction activities at the 250 megawatt (MW) California Valley Solar Ranch (CVSR) power plant project. Additionally, we completed the permitting process for our three contracts with Southern California Edison, totaling 711 MW,” noted Werner.

2012 financial guidance

The company guided first quarter GAAP revenue to be in the range of US$420 million to US$495 million, with a gross margin of 9% to 11%. SunPower guided both GAAP and non-GAAP revenue for 2012 to be in the range of US$2.6 billion to US$3.0 billion. The company also noted that its expected recognized between 900MW to 1,200MW of sales in 2012.

According to Jeffries financial analyst, Jesse Pichel, the guided net loss per diluted share of ($0.20) to ($0.05) for the fist quarter of 2012 was wider than expected and said in a research note that company didn’t provide any visibility to 2012 profitability.

‘Module cost remains a drag, cost reduction plan accelerating: While the project and leasing business is quite profitable, the module sales business is extremely challenged with a product that costs more than Chinese product. Only when sold as a system or in a lease is the full value of higher efficiency SPWR panels monetized,’ wrote the analysts in an investor note. 

1 December 2021
Join over 500 attendees at this virtual conference on 1-2 December 2021 for expert presentations covering PV Module Technology, Supply & Site Optimisation for Utility-Scale. Delegates can access streamed presentations, session recordings and chat/messaging tools to connect with fellow delegates and speakers. Speakers include leading developers, manufacturers, testing and research institutes, including: NREL, Silicon Ranch, Sonnedix, Heliene, Powertis, LONGi Solar, JinkoSolar, PVEL, Risen Energy, Seraphim, STS, Trina Solar, Eternalsun Spire, QEERI, Fraunhofer, Estuary Capital Partners, VDE, First Solar, Longroad Energy, Powertis and DNV Energy Systems
2 December 2021
Intersolar is the world’s leading exhibition & conference series for the solar industry. As part of this event series, Intersolar India in Mumbai is India’s most pioneering exhibition and conference for India’s solar industry. It takes place annually and has a focus on the areas of photovoltaics, PV production and solar thermal technologies. Since 2019, Intersolar India is held under the umbrella of The smarter E India – India’s innovation hub for the new energy world.
9 December 2021
The Smart Energy Council is hosting Australia’s second Virtual Smart Energy Conference and Exhibition on Thursday, 9 December 2021. This event will show that the industry powers on despite COVID-19 and we are standing together undeterred in spirit. Bringing our global community together using the latest technology.
13 January 2022
Intersolar North America and Energy Storage North America “Come Together” for the first time in Long Beach, CA—connecting installers, developers, utilities, technology providers, policy makers, and key stakeholders from around the world to advance the clean energy future. With best-in-class conference programming, integrated exhibits and pavilions, and the live Solar Games installer competition, #isnaesna21 will showcase the industry trends, innovative solutions, and emerging talent transforming the solar, energy storage, and e-mobility markets. Register today to redeem our exclusive offer for PV Tech readers—free expo hall or 20% off full conference pass.
1 February 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.

Read Next

December 1, 2021
The price of shipping containers from Asia to Europe and North America remains high but should start to come down in the new year, although the main price drops won’t occur in earnest until 2023 when new capacity is brought online. That additional capacity, however, may be offset by new International Maritime Organisation (IMO) rules to address the industry’s emissions
December 1, 2021
Enefit Green, the renewables subsidiary of Estonian state-owned utility Eesti Energia, is looking to procure up to 500MW of solar modules in the next three years.
December 1, 2021
Tech major Amazon has added a further 2GW to its committed utility-scale solar PV capacity, adding projects in the US and Europe to its renewables portfolio.
December 1, 2021
Global solar PV deployment is on track to grow by 17% this year in spite of surging commodity prices increasing manufacturing costs, according to the International Energy Agency (IEA).
December 1, 2021
The European Commission (EC) has approved the extension of Poland’s auction scheme for renewable resources that is predicted to support the creation of 9GW of renewables after it passed EU state aid rules
December 1, 2021
LONGi Solar has dropped its wafer prices by as much as 9.75%, its first such fall in more than a year, as signs continue to mount that industry prices are set to normalise into next year.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
December 1, 2021
Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal