SunPower Corp. announced financial results for its 2010 second quarter which ended July 4, 2010.
"SunPower had a strong second quarter, as our Non-GAAP EPS of $0.15 exceeded our internal plan, and we remain on track to meet our 2010 financial and operating plans," said Tom Werner, SunPower’s CEO. "Our growing pipeline of 2011 Utility and Power Plants (UPP) business bookings, as well as the continued momentum in our Residential and Commercial (R&C) business, adds to our confidence and visibility for 2011. Additionally, we are pleased with the significant progress we’re making on our cost reduction roadmap and expect that our joint venture with AU Optronics (AUO) to accelerate this process."
"In the Residential and Commercial business, we expanded our global dealer footprint in the U.S., France and Italy, as well as hit a new milestone for project scale within our Commercial business with a 4-MW project for Dow Jones & Company," continued Werner. "In our Utility and Power Plants business, we executed on our second quarter construction plans, and yesterday announced a definitive Euro 48 million agreement for the sale of the equity of two Italian power plants totaling 28 MW. We also remain confident in our 2011 visibility on both volume and price, as we have more than 100 MW of UPP orders booked for next year with our 2011 first-quarter bookings at the best levels in two years.
"Operationally, we have accelerated our cost reduction plans for both panels and balance-of-system (BOS). We are forecasting our efficiency-adjusted cost per watt relative to conventional solar panels to be $1.36 as we exit the year and we expect to reach $1.08 by the fourth quarter of 2011. The efficiency adjusted value reflects our world-leading high-efficiency solar panels and resulting lower BOS and tracking costs. Additionally, we launched our Fab 3 joint venture with AUO in July and are analyzing new ways to leverage the operating and procurement strengths of both companies to maximize benefits of our new relationship. Finally, we are accelerating our BOS cost reduction roadmap, including the introduction of our standardized Oasis power plant in the second quarter, which reduces BOS costs by up to 25%," Werner concluded.
On a Generally Accepted Accounting Principles (GAAP) basis, second-quarter 2010 results include a $0.50 per share tax expense (including tax expense associated with discontinued operations) and a $0.30 per share pre-tax gain resulting from the company’s investment in Woongjin Energy, as well as a $0.36 per share pre-tax gain related to mark to market derivative contracts. On a Non-GAAP basis, second-quarter 2010 results exclude the one-time gain on Woongjin’s initial public offering as well as the impact of mark to market derivative transactions.
"During the second quarter we continued to focus on improving our balance sheet and managing our liquidity," said Dennis Arriola, SunPower CFO. "Our joint venture with AUO will reduce our capital outlay for Fab 3 by approximately 50% and further deleverage our balance sheet. As we announced yesterday, we have made significant progress in financing and selling our Montalto projects in Italy and remain on track to debt finance and monetize the balance of the Italian projects currently under construction by the end of 2010. We have also substantially mitigated the risk of our expected second half of 2010 net Euro exposure as 93% of that exposure is hedged at a US dollar rate of 1.35 to one Euro. Finally, we finished the quarter with $737 million in total cash and investments, and $75 million in additional liquidity available under the IFC loan. We are well positioned to meet our second half of 2010 and full-year guidance."
