SunPower (SPWR) Tops Q1 EPS by 9c, Revenues Beat; Provides 2Q Revenue Guidance Below Consensus

SunPower (NASDAQ: SPWR) reported Q1 EPS of ($0.10), $0.09 better than the analyst estimate of ($0.19). Revenue for the quarter came in at $454.4 million versus the consensus estimate of $408.75 million.

First Quarter Company Highlights

• Strong global Distributed Generation (DG) demand – 50 percent year over year volume growth
• Significant progress in Commercial Direct business – expected profitability in second half 2020
• Continued investment in new products/services – next generation Maxeon technology, Equinox storage, digital
• Spin-off of Maxeon Solar Technologies expected for second quarter of 2020, pending regulatory approval and the signing of financial facilities
• Focused on health and safety of employees and customers during pandemic
• Anticipated cost/cash savings of up to $100 million in 2020 - available liquidity of up to $500 million over next 12 months

"We had a strong start to the year, exceeding our margin and adjusted EBITDA guidance driven by strong global DG demand and outperformance by our U.S. channels business," said Tom Werner, SunPower CEO and chairman of the board. "However, we have seen a material impact across the industry and our business, caused by the COVID-19 virus pandemic during the second quarter. Our primary focus during this disruption remains on the safety and well-being of our employees, working closely with our partners and maintaining our industry leading customer service levels. Despite the disruption, our fundamentals remain strong and we believe that our differentiated business model, rigorous prioritization of cost containment and continued investment will position the company well post-pandemic."

"Looking forward, we remain very confident in the significant longer term growth opportunity in solar and our investment priorities are consistent with this potential. These investments include our next generation Maxeon technology, Equinox and Helix storage solutions and our digital initiatives. We have also instituted a number of programs that we expect to result in cost and cash savings of up to $100 million in 2020. Finally, we expect to complete our planned company split into two, independently focused, pure-play solar companies by the end of the second quarter pending closing conditions. With further investment in our industry-leading technology and initiatives in place to strengthen our balance sheet, we remain focused on emerging from the current disruption in a much stronger competitive position."

GUIDANCE:

SunPower sees Q2 2020 revenue of $290-330 million, versus the consensus of $442.82 million.

As previously announced, the company continues to assess the impact of the COVID-19 crisis on its fiscal year 2020 forecasts. As a result, the company will not be providing fiscal year 2020 guidance at this time.

The company's second quarter 2020 GAAP and non-GAAP guidance is as follows: on a GAAP basis, revenue of $290 million to $330 million, gross margin of negative 9 percent to negative 3 percent and net loss of $120 million to $100 million. On a non-GAAP basis, the company expects revenue of $290 million to $330 million, gross margin of 0 percent to 6 percent and megawatt (MW) deployed in the range of 340 MW to 400 MW. The company also expects break even to slightly positive cash generation in the second quarter.

The company expects second quarter 2020 Adjusted EBITDA guidance in the range of negative $40 million to negative $20 million with SPT in the range of negative $25 to $15 million and SPES in the range of negative $10 to $0 million.

For earnings history and earnings-related data on SunPower (SPWR) click here.

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