SunPower Corp. SPWR reported first-quarter 2015 adjusted earnings per share of 5 cents, lagging the Zacks Consensus Estimate by 44.4%. Earnings also plunged from the year-ago figure of 39 cents per share.
Lower revenues along with rising costs negatively impacted the company’s first-quarter results.
Operational Results
During the quarter, SunPower generated non-GAAP revenues of $430.6 million, missing the Zacks Consensus Estimate of $531 million by 18.9%. Revenues also dropped 37% from the year-ago figure of $683.7 million.
SunPower’s gross margin of 20.5% was down from the year-ago margin of 22% but gained 10 basis ponts sequentially. Total operating expenses escalated 13.1% year over year but declined 7.6% sequentially to $102 million. Operating expenses increased on account of higher research and development (up 26.9% year over year) and selling, general and administrative (up 4.5% year over year) expenses.
The company is well on track with the formation of a joint YieldCo vehicle with First Solar, Inc. FSLR. YieldCo will be a publicly traded subsidiary that essentially makes it easier for renewable energy companies to raise funds for new projects. Each company is expected to contribute a portfolio of solar generation assets.
Financial Condition
SunPower exited the first quarter with cash and cash equivalents of $601.6 million, down from $956.2 million at the end of 2014.
Long-term debt increased to $296.3 million from $214.2 million at 2014 end.
Net cash used in operating activities was $113.4 million in the quarter as compared to net cash from operating activities of $50.5 million in the first quarter 2014.
Free cash outflow was $143.4 million as against a free cash inflow of $96.6 million in the year-ago quarter.
Guidance
Given its plans to form a joint YieldCo with First Solar, the company announced that it will provide fiscal 2015 guidance later taking into account the impact of the proposed YieldCo vehicle on its expected financial performance.
At its Peer
First Solar Inc. reported adjusted first-quarter 2015 loss of 62 cents a share, much wider than the Zacks Consensus Estimate of a loss of 29 cents.
Upcoming Release
Canadian Solar Inc. CSIQ is scheduled to release first-quarter results on May 7.
JA Solar Holdings Co., Ltd. JASO is expected to release first-quarter results on May 14.
Zacks Rank
SunPower currently carries a Zacks Rank #3 (Hold).
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