SunPower Corporation (SPWR, Financial) designs, manufactures and delivers the highest efficiency and highest reliability solar panels and systems available today.
Residential, business, government and utility customers rely on the company’s quarter century of experience and guaranteed performance to provide maximum value throughout the life of the solar system. Headquartered in San Jose, California, SunPower has offices in North America, Europe, Australia, Africa and Asia.
The company recently reported strong fourth-quarter results. It reported a record EBITDA of more than $550 million during the year. It executed well in its residential business. In North America, performance was solid as fourth-quarter results exceeded plan. It gained market share and broadened leasing footprint as megawatt-installed growth exceeded 45% year over year. Additionally, based on the fourth-quarter bookings, the company expects continued strong residential demand in 2016.
During the fourth quarter, it successfully met project commitments, added to its pipeline and further built its U.S. HoldCo asset base. It made strong progress on cost reduction roadmaps and in the fourth quarter announced the launch of a new lower cost, high efficiency Performance Series product line that enhances ability to rapidly expand SunPower's global footprint with significantly lower capital cost.
Strong fourth quarter
GAAP revenue during the fourth quarter was $374.4 million (which was $1.16 billion in the prior-year quarter).
Full year GAAP revenue was $1.58 billion.
GAAP gross margin during the current quarter was 5.4% (22.3% during the prior-year quarter).
GAAP gross margin during the full year was 15.5%.
GAAP net loss was $127.6 million during the fourth quarter ($134.7 million in the prior-year quarter).
GAAP net loss per diluted share was 93 cents (83 cents during the prior-year quarter).
Non-GAAP revenue during the fourth quarter was $1.36 billion (which was $609.7 million during the prior-year quarter).
Non-GAAP revenue during the full year was $2.61 million.
Non-GAAP gross margin during the current quarter was 29.8% (20.4% during the prior-year quarter).
Non-GAAP gross margin during the full year was 23.9%.
Non-GAAP net income during the quarter was $270.4 million ($39.4 million during the prior-year quarter).
Non-GAAP net income during the full year was $337.8.
Non-GAAP net income per diluted share during the fourth quarter was $1.73 (26 cents during the prior-year quarter).
Non-GAAP net income per diluted share during the full year was $2.17.
EBITDA during the quarter was $379.9 million (which was $84.9 million in the prior-year quarter).
EBITDA for the full year was $556.5 million.
Strong points of the fourth quarter
- Solid execution across all segments.
- Ability to leverage development capabilities.
- Strong balance sheet.
- Prudently managed working capital.
Expectations for 2016
On a non-GAAP basis:
- Revenue to be around $3.2 billion to $3.4 billion.
- Gross margin of 14% to 16%.
- Capex to be around $210 million to $240 million.
On a GAAP basis:
- Revenue to be around $2.2 billion to $2.4 billion.
- Gross margin in the range of 17% to 19%.
- Net income of up to $50 million.
Focus
The company is executing on technology roadmaps:
- Added new products.
- Expanded global power plant footprint while completing the world's largest solar power plant, located in California.
- Cost curtailment.
- Operational efficiencies.
On a concluding note
2015 was a very good year for the company since the industry was characterized by increasing demand, favorable policy developments and broad global support for renewables. There are strong industry growth fundamentals.
The company capitalized on these benefits. It is well positioned to capitalize on the continued growing adoption of solar in North America as well as key international markets such as China and Latin America. It launched a range of complete customer solutions for the commercial market that will significantly reduce cost while improving performance. Given strong global demand as well as a favorable policy environment, the company is poised to grow.
Disclosure: I do not hold any position in the company.
