Published on February 20th, 2019 | by Joshua S Hill0
SunPower Reports Mixed Q4 & Full-Year 2018 Results
February 20th, 2019 by Joshua S Hill
Silicon Valley solar manufacturer SunPower published its Fourth Quarter and Fiscal Year 2018 financial results last week revealing relatively mixed results across the board, showing quarterly growth but well down on yearly metrics and falling well below market consensus.
SunPower reported GAAP revenue for the fourth quarter of $456.8 million, up by 6% on the third quarter but falling 30% on the same quarter a year earlier. The company is used to experiencing record growth in the fourth quarter as developers seek to finish by year’s end and qualify for whatever government support mechanisms are on offer. However, the solar industry in 2018 was impacted heavily by the Section 201 tariffs which likely explains much of the decline from year to year. Non-GAAP revenue for the quarter was $525.4 million, up from $443.4 million and well down on the $824 million taken in the fourth quarter of 2017 and missing market expectations by $40.58 million.
GAAP earnings per share for the fourth quarter fell into a loss of -$1.12 which exceed market expectations by $0.35, although on a non-GAAP basis the company reported a loss of only -$0.21 beating expectations by $0.13.
For the Fiscal Year 2018 SunPower reported GAAP revenue of $1,726.1 million, down only slightly on the $1,794 million taken in during 2017, and decreased its GAAP net-loss by almost $1.
“I’m pleased we were able to post solid financial performance for the quarter while achieving a number of strategic milestones including re-segmenting our business structure to improve transparency and accountability, the initial production of our NGT cell and panel technology, as well as further delivering our balance sheet through the successful deconsolidation of our residential lease portfolio,” said Tom Werner, SunPower CEO and chairman of the board.
“We executed well in our North American distributed generation (DG) business as demand remained strong in the fourth quarter. In particular, our U.S. residential business saw annual deployment growth of more than 15 percent. We saw increased demand for our complete residential Equinox solution , further traction for our loan product, and expanded our leadership position in the new homes channel with partnerships with 17 of the top 20 U.S. new home builders. Finally, we continue to see strong interest in our residential storage and services offerings and remain on plan to launch our Equinox residential storage solution this year.” – Werner
“SunPower recorded mixed results as sales were below consensus and at the lower end of guidance, yet we believe a better-than-expected EBITDA result and the realization of balance sheet de-leveraging show promise,” wrote James Evans of Bloomberg Intelligence, who provided his comments for publication.
“Strength in its US residential business offset a weaker-than-expected commercial result, yet we anticipate this will improve toward the end of 2H on high bookings activity and as lower-margin legacy projects are completed.
“The company’s net debt position halved sequentially in 4Q as a result of SunPower’s asset sales, which is also leading to a lean operating model and bolstering cash generation. SunPower’s plans to further shift to an asset-light operating structure should boost capital efficiency, with measures including lower capital spending and working capital improvements.”
Looking forward, SunPower “expects financial performance to improve on a quarterly basis throughout fiscal year 2019 with performance weighted towards the second half of the year” and further expects its adjusted EBITDA to “increase approximately 60 percent on a normalized basis adjusting for non-controlling interest due to the sale of its residential lease portfolio, as well as the impact of Section 201 tariffs paid during the year, both of which will not occur in 2019.”
Thus, SunPower is expected GAAP revenue for the first quarter to amount to be in the range of $290 million to $330 million with a gross margin in the range of -3% to 0% with a net loss in the range of $70 million to $50 million and gigawatts-deployed for the quarter in the range of 360 megawatts (MW) to 400 MW. For the Fiscal Year 2019, SunPower expects GAAP revenue in the range of $1.8 billion to $1.9 billion with gigawatts-deployed to be in the range of 1.9 GW to 2.1 GW.