SunPower Beats, Traders Fade News Initially (SPWR)
SunPower (NASDAQ: SPWR) has posted $0.39 Non-GAAP EPS on revenues $273.7 million. This translates to $0.15 GAAP EPS. These numbers are above plan according to First Call estimates of $0.35 non-GAAP EPS and $245.2 million in revenues.
The company is also raising guidance. It sees Q2 2008 non-GAAP EPS $0.48 to $0.52 on $330 million to $350 million revenues, which compares to estimates of $0.46 EPS and $295 million in revenues. It also sees non-GAAP gross margin of 23% to 24%. For fiscal 2008 the company sees non-GAAP EPS of $2.10 to $2.20 on $1.3 billion to $1.375 billion revenues, while First Call has estimates at $2.07 EPS and $1.27 Billion in revenues.
It is also reconfirming 2009 forecast for total revenue to increase at least 40% from 2008 levels. If we interpolate this it translates to “at least” $1.82 Billion to $1.925 Billion, which compares to First Call targets of $1.88 Billion.
SunPower also noted that it is still aggressively expanding solar cell production by more than 150% in 2008 compared to 2007. It expects silicon supply costs to decline by approximately 10% during 2008 and expects to reach its targets of 30% gross margin, 10% operating expenses and 20% operating margins on a non-GAAP basis, no later than the first quarter of 2009. It also believes that 100% of projected solar cell production is secured with contracted silicon through 2010, and below is a table of its expected output:
MEGAWATT CAPACITY 2008 2009 2010
Nameplate capacity: 214 414 574
With Silicon Agreements: 255 450+ 650+
Shares of SunPower are seeing a bit of a “sell the news” this morning and are trading down by more than 3% at $96.00 in pre-market trading. The 52-week trading range is $51.00 to $164.49. Based on yesterday’s close, these forecasts would give the company roughly a 47.4 to 45.2 forward P/E ratio (non-GAAP).
Jon C. Ogg
April 17, 2008
Jon Ogg produces the Special Situation Investing Newsletter. He can be reached at firstname.lastname@example.org and he does not own securities in the companies he covers.