US solar manufacturer and developer SunPower Corp (NASDAQ:SPWR) released third-quarter figures on Wednesday accompanied with plans to cut costs, an increased cooperation with Total SA (EPA:FP) and revised outlook.
The company said it has delivered solid third-quarter results, meeting or exceeding its key financial targets, but added that near-term market dislocation in the solar market will impact its financial performance through 2017. In response, it will undertake cost reduction initiatives, including cutting 2017 annual operating expenses to about USD 350 million (EUR 318m) and reducing capacity to lower inventory. Details of the restructuring programme will be announced on December 7.
In addition, SunPower said it is increasing cooperation with its majority owner, French energy group Total. It has signed a four-year agreement to supply up to 200 MW of panels for installation at Total facilities around the world. The deal includes pre-payment of about USD 90 million. The companies are also in discussions to expand their global power plant partnership to include potential Total project ownership opportunities in markets such as Japan, South Africa and France.
"With this cost reduction program, as well as continued strong support from Total, we believe we will be able to reduce our cost structure, more prudently allocate our product and technology investments, appropriately size our manufacturing to balance production with near term demand, and improve cash flow," said president and chief executive Tom Werner. "Combined with our realignment initiatives announced last quarter, we believe we will be well positioned for sustained profitability when market conditions improve," Werner added.
The company again revised its 2016 financial guidance to reflect near-term industry conditions and its cost reduction programme. It also withdrew its 2017 forecast. The current and previous outlook are shown in the table below.
|GAAP Gross Margin
||8% to 10%
||9.5% to 11.5%
|GAAP Net Loss
|Non-GAAP Gross Margin
||9% to 11%
||10.5% to 12.5%
||1.325 to 1.355
||1.45 to 1.65
For the third quarter, SunPower reported revenue of USD 729.3 million, up from USD 380.2 million a year ago and a USD-40.5-million net loss, compared to a USD-56.3-million loss in the same quarter of 2015. Gross margin improved to 17.7% from 16.5%. On non-GAAP basis, it recorded a net profit of USD 97 million, against a profit of USD 20.5 million last year.
For the fourth quarter, the company expects revenue of USD 900 million to USD 1.1 billion, gross margin of 0% to 2% and net loss of USD 100 million to USD 125 million.
(USD 1.0 = EUR 0.909)
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