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SunPower Corporation’s (SPWR - Analyst Report) first quarter 2013 adjusted earnings per share (including stock-based compensation) were 15 cents per share compared to a loss of 23 cents per share incurred in the year-ago quarter.

The results were attributable to its high efficiency solar panels and strong performance from both rooftop and ground mount teams.

GAAP loss during the quarter was 46 cents per share, which included one-time charges of 61 cents per share, narrower than the year-ago GAAP loss of 67 cents per share.

Operational Results

SunPower generated revenues of $635.4 million, higher than the Zacks Consensus Estimate of $542 million and the year-ago figure of $494.1 million.

During the quarter under review, revenues generated in the Americas were $484.1 million compared with $281.5 million in the prior-year period. Revenues in Europe, the Middle East and Africa were $68.7 million versus $156.1 million in the year-ago quarter. Revenues from Asia-Pacific were $82.7 million, up from $56.5 million in the year-ago period.

SunPower’s gross margin for the quarter expanded to 22.7% from 12.7% a year ago.

Financial Condition

SunPower at the end of the reported period had cash and cash equivalents of $505.6 million, compared with $457.5 million at the end of 2012. Net cash from operating activities was $166.9 million compared to ($120.7) million in the year-ago quarter.

Our Take

SunPower posted higher revenues in the quarter, beating the Zacks Consensus Estimate. Given its strong project backlog, continued growth in residential lease and global focus on improving its cost structure, it seems easy for the company to achieve its targets.

During the quarter, the company began the construction of the mega 579-megawatt Antelope Valley Solar Projects for MidAmerican Solar. Also, the company has almost completed the construction of California Valley Solar Ranch project owned by NRG Energy, Inc. (NRG - Analyst Report).

Over the near term, however, we are apprehensive about the glut of solar panels in the market, lower average selling prices, rising competition, financial stability of its customers and foreign exchange risk. SunPower presently retains a short-term Zacks Rank #3 (Hold).

Stocks worth considering in the alternative energy space are ReneSola Ltd. (SOL - Analyst Report) and STR Holdings, Inc. (STRI - Snapshot Report), both with a Zacks Rank #2 (Buy).


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