SunPower profit beats Wall St view, shares jump

CALIFORNIA, USA: SunPower Corp posted fourth quarter earnings that topped Wall Street forecasts and it forecast strong sales this year, lifting shares of the solar panel maker 15 per cent in post-market trading.

The company, maker of the highest efficiency solar panels on the market, also said it grew its market share in California's residential market during the quarter, a segment its competitors have been targeting over the past two years.

Solar companies suffered through most of 2011 as prices for the panels that turn sunlight into electricity fell by nearly 50 per cent, squeezing margins and driving some smaller players into bankruptcy.

Still, one-time charges related to SunPower's large, utility-scale projects and restructuring costs made for a "messy quarter," according to Pavel Molchanov, analyst with Raymond James, who noted earnings before interest, tax, depreciation and amortization (EBITDA) was a negative $17 million.

"I think this is a classic relief rally" in the shares, he said.

SunPower, majority-owned by French oil company Total SA , reported a net loss of $83 million, or 84 cents per share, compared to net income of $152.3 million, or $1.44 per share, a year ago.

But excluding one-time items, the company posted a profit of 16 cents per share in the quarter. That came in well above analysts' average forecast for a loss of 5 cents per share, according to Thomson Reuters I/B/E/S.

It forecast sales for 2012 between $2.6 billion and $3.0 billion, compared to analysts' average forecast of $2.7 billion.

Molchanov said the backing of Total had provided a major boost to the company during the quarter, allowing it to free up $140 million in restricted cash that it can now put to use.

"This is really how the Total relationship was able to help the company," he said.

Total increased its stake in SunPower to 66 per cent during the quarter -- after taking a 60 per cent stake earlier in the year -- under a set of transactions that also saw SunPower buy Total's Tenesol solar unit.

SunPower said it expected to post a loss of between 5 cents to 20 cents per share in the first quarter, but that it hoped to reach breakeven or better for the year, excluding extraordinary items.