Q4 Preview: Italian Contracts, Oil Prices to Drive Solid SunPower (SPWRA) Report
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SunPower Corporation (Nasdaq: SPWRA) is trading higher today, ahead of the company's fourth quarter earnings report, expected out after the market closes. Shares are up 1.9% this afternoon.
SPWRA is expected to report EPS of $1.05 on revs of $931.40 million. Last quarter, the San Jose, CA-based PV producer reported EPS of $$0.26 on revs of $555.6 million, topping consensus expectations. Looking back at Q409, we see that SunPower produced adjusted EPS of $0.47 on revs of $548, which was also stronger than the consensus.
Shares lost 8.8% through the quarter, to $12.83 at the end of December. The stock is up almost 37% since then, and finished-out 2010 about 46.4% lower.
A simple valuation puts SunPower with a forward P/E of 9.4x FY11 EPS estimates, compared to 8.8x for Yingli Green Energy (NYSE: YGE), 18.8x for First Solar (Nasdaq: FSLR), and 6x for JA Solar (Nasdaq: JASO).
Data from Bloomberg has 13 analysts with a Buy on SPWRA, 21 with a hold, and six suggesting to Sell. The analyst price target average is $17, with a high of $30 and low of $7. Shares have traded in a range of $22.19 - $9.61 over the last 52-weeks.
Summary
SunPower guided for EPS of $0.95 - $1.15 and sales of $870 - $970 million. The numbers were cut last quarter from EPS range of $1.05 - $1.35 and revs of $825 million - $1.23 billion.
SPWRA is expected to report EPS of $1.05 on revs of $931.40 million. Last quarter, the San Jose, CA-based PV producer reported EPS of $$0.26 on revs of $555.6 million, topping consensus expectations. Looking back at Q409, we see that SunPower produced adjusted EPS of $0.47 on revs of $548, which was also stronger than the consensus.
Shares lost 8.8% through the quarter, to $12.83 at the end of December. The stock is up almost 37% since then, and finished-out 2010 about 46.4% lower.
A simple valuation puts SunPower with a forward P/E of 9.4x FY11 EPS estimates, compared to 8.8x for Yingli Green Energy (NYSE: YGE), 18.8x for First Solar (Nasdaq: FSLR), and 6x for JA Solar (Nasdaq: JASO).
Data from Bloomberg has 13 analysts with a Buy on SPWRA, 21 with a hold, and six suggesting to Sell. The analyst price target average is $17, with a high of $30 and low of $7. Shares have traded in a range of $22.19 - $9.61 over the last 52-weeks.
Summary
SunPower guided for EPS of $0.95 - $1.15 and sales of $870 - $970 million. The numbers were cut last quarter from EPS range of $1.05 - $1.35 and revs of $825 million - $1.23 billion.
- Kaufman is looking for $940 million in revs with non-GAAP EPS of $1.06. Estimates are boosted "a result of the Fab 3 plant beginning to ramp and with that, our expectations of increasing production levels. But even more importantly, a number of large solar power plant installations were completed in the fourth quarter." They also think that their is limited upside potential to their EPS view based on fixed price for solar plants and stable module pricing.
Looking at FY11, Kaufman expects SPWRA to produce revs of $2.68 billion with non-GAAP EPS of $1.92. Kaufman said, "We look to get more positive on the company if its technology advantage is matched with cost/watt reductions. Important to note, SunPower's cell efficiency of 22% is unrivaled to date. This justifies a higher module price, which is likely sustainable in the near term. However, we believe SunPower's focus on reducing current module cost/watt of $1.91/Wp to $1.71/Wp by 2010 year-end ($1.71Wp currently built into our 2010 estimates) is warranted to increase project IRRs and as a result, overall profitability."
Kaufman has a Hold on the shares, with a price target of $13.50.
- Hapoalim Securities is looking for revs of $971 million and non-GAAP EPS of $1.12. They note that shipments will be 232-MW in the quarter. Hapoalim comments, "Within its R&C segment, we see 14.5 MW of NAC shipments at an average system ASP of $4.85 and 74 MW of RLC shipments at a blended ASP per bundle of $3.23 to drive total R&C revenue of $309.8 million...With production cost per watt of $1.71, a 10% decline in NAC and UPP BoS costs and a steeper 18% decline in RLC costs, we forecast non-GAAP margins of 26.6% at R%C and 22.2% at UPP to drive consolidated non-GAAP gross margin of 23.6% ahead of guidance of a range between 20-22%."
Hapoalim has a Hold on the shares, with a $14 price target.
- Miller Tabak + Co. sees non-GAAP EPS of $1.04. The quarter will be driven by utility project sales in the Italian market. Miller Tabak is modeling for gross margins of 20%. "We anticipate Sunpower’s manufacturing costs to remain relatively flat at $1.70/watt in the Q, still well above Chinese competition." Miller is also "are forecasting blended ASPs of $2.20/watt (-2.2% q/q) to have declined slightly in the Q, however see greater risk of pricing pressure playing out over 2011 as competition increases for N. American market share."
Miller Tabak has a Neutral rating with price target of $14.
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