SunPower Misses Q4 Earnings & Reports Net Loss, Investors Remain Confident
The number two US solar PV manufacturer SunPower reported its earnings for the fourth quarter and full year 2016 this week, reporting a larger net loss than expected, and missing analyst expectations for revenue.
It’s been a rocky few quarters for SunPower, America’s second solar PV manufacturer. In November the company reported solid earnings, but dire warnings for the future, which saw the company’s shares tank. Tom Werner, SunPower president and CEO, explained that ““While prospects for long term solar industry growth remain strong, we are seeing a significant near term market dislocation in the solar market that we expect will impact our financial performance through 2017.” SunPower also announced a restructuring program which would lead to workforce, production, and capital cuts.
Unfortunately for SunPower, reporting its fourth quarter and full year 2016 earnings this week, the company reported 2016 revenue of $2.5 billion — well within the guidance it presented a quarter ago, and well up on full year revenue for 2015 ($1.5 billion) — but fell well short of its gross margin guidance (7.4%, down on guidance of between 8% to 10%) and reported a much larger net loss than was expected (a net loss of $471 million, compared to a guided net loss in the range of $295 million and $320 million). This equates to a net loss attributable to stockholders of $275 million, or $1.99 per share.
“SunPower’s diversified business model enabled us to meet our revenue plan and exceed our operating cash flow target in the fourth quarter,” said Tom Werner. “While overall industry conditions remain challenging, we are encouraged to see continued solid demand for our complete solutions offerings in all three end segments.”
“Despite the difficult industry environment, our solid execution enabled us to achieve our key financial metrics for the quarter, including generating $485 million in operating cash flow, which we used to reduce our debt by approximately $500 million,” added Chuck Boynton, SunPower chief financial officer. “Our focus this year remains on improving cash flow, prudently managing our working capital and deleveraging the balance sheet. We believe that this will position us well for success as the solar industry transitions through the current challenges to sustainable profitability.”
Despite the doom and gloom, and a mild downtick in the company’s shares following the quarterly earnings announcement, SunPower shares retained their value and finished trading on Wednesday actually up a few cents. This likely has to do with the company’s firm guidance for 2017, which appears to take note of the difficult challenges ahead for the industry. Specifically, SunPower is guiding revenue for the full year 2017 to be in the range of $1.8 billion to $2.3 billion (GAAP — $2.1 billion to $2.6 billion non-GAAP) and a total of between 1.3 gigawatts (GW) and 1.6 GW deployed. The company is also expecting to incur GAAP restructuring charges totaling between $50 million to $100 million.
For the first quarter, SunPower is expecting revenue of between $315 million and $365 million, a gross margin of -2% to 0%, and a net loss of between $175 million to $150 million.
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