SunPower (Nasdaq:SPWRA) Maintained at Outperform at Cowen - Cut EPS Forecasts

Mar 19, 2010
Author: SCP Editor

March 19, 2010 – Analyst Comments – Cowen’s Stone maintained his OUTPERFORM rating on SunPower (Nasdaq:SPWRA) after it reported financial results, which have the stock trading lower this morning. Stone recommends investors buy on weakness.

Financial ResultsSunPower reported Q409 revenues of $548 million, compared to $465 million in Q309 and $398 million in Q408. Components and Systems accounted for 62% and 38% of Q409 revenue, respectively. Gross margin for Q409 was 20.3%, compared to 21.5% the prior quarter and 28% for Q408. Net income was $8.6 million, or $0.09 per share for Q409, compared to net income of $19.6 million and $28.4 million, respectively.

For the FY09, revenues were $1.5 billion compared to $1.4 billion for FY08 with gross margin of 18.6% and 24.3%, respectively. Net income for FY09 was $33.1 million, or $0.36 per diluted share, compared to $89.5 million for FY08.

In terms of guidance, management expects FY10 revenue of $2 to $2.5 billion, net income per diluted share of $0.05 to $0.35, with solar cell production of about 550MW. For Q110, it expects revenue of $330 to $350 million and net income per diluted share of about breakeven.

Key Takeaways

·         SunRay project pipeline diversifies the portfolio of channels and markets, adding 1.2GW AC pipeline in Europe

·         SPWRA has not German ground mount exposure

·         Raised 2010-12E revenue to $2.125B, $3.075B and $4.3B, cut component GM to 21-21%, and cut EPS to $1.42, $2,16 and $2.93, respectively. Starting 2013E EPS at $3.83 on $5.8B.