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Why Is SunPower (SPWR) Up 2.2% Since Last Earnings Report?

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It has been about a month since the last earnings report for SunPower (SPWR - Free Report) . Shares have added about 2.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is SunPower due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

SunPower Q4 Loss Narrower Than Expected, Revenues Down

SunPower Corp. reports fourth-quarter 2018 adjusted loss of 21 cents per share, narrower than the Zacks Consensus Estimate of a loss of 38 cents. However, in the year-ago period, the company delivered earnings of 25 cents per share.

Excluding one-time adjustments, the company incurred a GAAP loss of $1.12 per share, narrower than the year-ago quarter’s loss of $4.10.

For 2018, earnings were 72 cents per share, better than 25 cents in the year-ago quarter. However, the figure missed the Zacks Consensus Estimate of 97 cents.

Operational Results

During the quarter under review, SunPower reported adjusted revenues of $525.4 million, which missed the Zacks Consensus Estimate of $587 million by 10.5%. Also, the top line declined 36.2% from the year-ago quarter’s $824 million.

The downside in revenues during the quarter was on account of low revenue figures registered by SunPower Technologies compared with the year-ago quarter’s figures.

In 2018, total revenues decreased 14.7% year over year to $1,814.9 million. Full-year revenues also missed the Zacks Consensus Estimate of $1,870 million by 2.9%.

Total operating expenses in the quarter declined 79.3% to $149.3 million compared with that in the fourth quarter of 2017. The reduction was primarily due to lower research and development expenses, decrease in sales, general and administrative expenses and low expenses incurred on
impairment of residential lease assets.

Financial Position

SunPower had cash and cash equivalents of $309.4 million as of Dec 30, 2018, compared with $435.1 million as of Dec 31, 2017.

Long-term debt was $40.5 million as of Dec 30, 2018, compared with $430.6 million as of Dec 31, 2017.

In the third quarter, net cash outflow from operating activities was $26.3 million against the cash inflow of $47.9 million in the year-ago period.

Q1 and Full-Year 2019 Outlook

The company expects to generate adjusted revenues of $350-390 million in the first quarter of 2019.  Adjusted gross margin is estimated to be 3 -5%. The company also anticipates deployment of 360-400 megawatts in the period.

SunPower expects to generate adjusted revenues of $1.9-2.0 billion in 2019.  Adjusted EBITDA is estimated to be $80-$110 million. The company also anticipates deployment of 1.9-2.1 gigawatts in the period.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.


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