SunPower Can Brighten Your Portfolio

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Oct 28, 2014

The solar energy industry has seen a surprising bounce back from 2009. The growth for 2014 is assessed to be 26%. After 2014, the long haul growth assesses for the most part run from 20% to 25%. While the general five-year development rate is exceptionally amazing, the 40 giga-watts introduced in 2013 was simply a small amount of one percent of the aggregate sum of power that was being produced by all sources around the world.

Different businesses indulging in providing solar energy based solutions are currently profiting from this development of solar market. SunPower Corp. (SPWR, Financial) designs, manufactures and delivers the highest efficiency, highest reliability solar panels and systems available today. The company delivers world's highest efficiency solar cells featuring SunPower Maxeon cell technology

SunPower holds more than 200 patents for solar technology and is backed with an experience of generating Total solar energy over 18,000,000 MWh. Private, business, government and utility clients depend on the SunPower’s decades of experience and ensured execution to give greatest rate of profitability for the duration of the life of solar power system. SunPower is one of the largest U.S. residential and commercial installed bases, with over 100,000 residential systems installed.

Quarterly Performance

Earlier this month, the company released its seconds quarter results for 2014, which were quite strong and above the expectation of the board members of the company. SunPower generated revenues of $621.1 million, down by 4.4% year over year. Revenue, however, surpassed the consensus estimate of $602 million and were near the high end of the guidance of $575–$625 million. Free cash outflow was $117.6 million against free cash inflow of $96 6 million in the year-ago quarter.

From past quarter, the pipeline has developed to more than 8 gigawatts as the company included more power plant opportunities globally, further expanding the North American commercial pipeline. A critical allotment of their incremental pipeline was in Asia Pacific, the Middle East and Africa where it continues to leverage their association with Total. The organization is together seeking after different activities with Total in various guaranteeing developing markets and is relied upon to include more open doors as the year progressed.

Outlook

Owing to a strong demand for the industry leading, high efficiency solar systems across all channels and geographic segments, the company is optimistic for the future revenue growth and strong upcoming financials. For the third quarter, it anticipates revenue to be in range of $600 million to $650 million, and gross margins range of 17% to 19%, net income per diluted share of $0.15 to $0.35. For the fiscal 2014 the anticipated projection stands unchanged for revenue to range in between $2.5 billion to $2.65 billion, gross margins in the range of 19% to 21%, net income per diluted share to be anywhere from $1.10 to $1.40.

"With our vertically integrated strategy, more than 8-gigawatts pipeline and industry leading technology, we are well-positioned to capitalize on the further development of the global solar market," said CEO Thomas Werner.

To leverage margins, the company stays focused on cost cutting measures coupled with new generation technologies. Furthermore, it is expanding its cell efficiency leadership, lower manufacturing costs and increase capacity to meet the robust demand for our solutions.

Leasing Program

SunPower is introducing a lease program to finance residential solar projects, a strategic move to broaden its global footprint to increase client numbers. It recently launched this program “SunPower Choice” in Melbourne, Australia. As part of the program, SunPower will install its high efficiency solar panels for eligible Melbourne homeowners with no upfront money against installation. It will be providing reliable, clean electricity at a predetermined and cost-competitive monthly rate for 25 years.

The electricity rates will be locked for the complete tenure of the lease, this enables the homeowners to be aware of the cost that they will be paying for electricity each month. The company also provides monitoring and any necessary maintenance at no additional cost for the length of the agreement. To guarantee clients that their framework will convey the influence and execution expected over the long haul, Sunpower Choice offers a cash back surety on the measure of sunlight based vitality the establishment creates yearly.

Conclusion

The Q2 performance was strong, this reflects sturdy demand for integrated solar power solutions provided by the company. With more than 8 gigawatt pipeline, the company remains confident that it will be able to significantly grow long term shareholder value.