North Coast Solar Stocks

October 23, 2009

SunPower shares tumble on lower 3Q, outlook

Filed under: SPWR — Tags: , , , , , — Jason @ 3:20 pm

SunPower shares tumble on drop in 3rd-quarter profit, lowered outlook

3:20 pm EDT, Friday October 23, 2009

NEW YORK (AP) — Shares of SunPower Corp. (SPWRA, SPWRB) tumbled on Friday, a day after the solar power products maker posted a 48 percent drop in third-quarter earnings and lowered the top end of its 2009 outlook.

Shares of the company fell $4.94, or 14.8 percent, to $28.36 in afternoon trading.

On Thursday after the markets closed, the San Jose company said its third-quarter profit fell 48 percent to 13 cents per share. On the bright side, excluding one-time charges, adjusted earnings amounted to 42 cents per share, beating Wall Street estimates of 40 cents per share.

For the full year, SunPower said it expects adjusted earnings to be between $1.15 per share and $1.25 per share on revenue of $1.43 billion to $1.5 billion. That’s slimmed down from its July estimates of $1.15 per share to $1.60 per share on revenue of $1.35 billion to $1.7 billion.

Caris & Co. analyst Ben Pang noted that the company cut its outlook despite signs of improving industry conditions.

“We think uncertainties around potential changes in the German feed-in tariffs could impact the near-term stock performance,” Pang said. He maintained an “Above Average” rating for SunPower, but cut his 2010 profit estimate for the company to $2.69 per share, down from $3 per share. Analysts expect a much lower profit of $1.84 per share for 2010.

Barclays Capital analyst Vishal Shah said that despite the stock’s tumbling price “we see limited downside risk to shares.” Shah cast a positive light on the company’s earnings news and outlook, highlighting that adjusted third-quarter earnings beat analyst expectations and that the company’s outlook is inline with expectations. Also, the company is sold out in the residential and commercial segment.

Shah held to his $35 price target and “Equal Weight” rating of SunPower.

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