SunPower (SPWR, Financial) reported strong results in the recently reported quarter. The main reason behind its robust performance was the solid demand for solar products, which it saw across all its geographies and channels. It is also seeing that ASPs are stabilizing in the future. As a result, SunPower is expecting better trends in the future. Moreover, the company is also making efforts to improve its market share and financial performance by focusing on various strategic initiatives and key markets.
Growth across the board
It is seeing good opportunities from the distributed generation business not only in the U.S as well as on the international front as well. The company is pleased with its performance in Japan, making it the strongest market for it. In addition, SunPower is confident about strong demands in future for its residential channel and its other offers also including cash, loan and lease. Its focus on the international projects remains consistent.
It is pleased to be executing well on the projects in South Africa and Chile. The performance is so robust that SunPower has been recently awarded a 41-megawatt supply agreement in the recent French tender process. Further with its APAC offering it has good plans to expand its low-concentration PV footprint in China which is expected to be a primary growth driver in future for the company.
Ramping up projects
Moving on, the ramp up of Fab 4 offering is moving positively but the company thinks it to be still in infancy. With this ramp up on the account of some minor building and fit-up issues, the company is now expecting a 10-megawatt impact from 2015 which will add much momentum to SunPower’s growth strategy.
SunPower is counting mainly on its power plants. It is seeing some concrete signs for example it is now reconnected with more than half of 579 megawatt solar star projects, revealing its strong hold in the market. In addition, the company is also nearing completion of its 135-megawatt Quinto project. Also, there are some other projects in Chile which are also nearing completion and are expected to be fully functional by the end of this fiscal year. Seeing this, SunPower is confident of starting fiscal 2015 strongly delivering better than expected results.
SunPower is focusing on stretching its footprints in the Chinese market as China being one of the most potential markets in the world. It also continue to ramp up its LCPV joint venture in China. Besides this, SunPower is also making several moves to explore more profitable opportunities. In addition, SunPower is also seeing good opportunities for its LCPV pipeline.
SunPower is also working strategically close with Total. Under such an alliance, the company is making good progress in its 8-gigawatt power plant pipeline and is expecting this to create ample opportunities for it in the near term. In addition, there are other bright opportunities summing up for SunPower in future. With the expansion of its corporate alliance program for both Audi and Volkswagen the company is well prepared to bring in its high quality, industry leading solar solutions to its U.S customers.
Moreover, SunPower has also extended its long-term partnership with Verizon. This 10-megawatt agreement will cover the deployment of rooftop, ground-mount and carport systems in eight different locations. Further in Europe, SunPower is seeing favorable demands and pricing. While the markets in Germany and France also remain positive on the back of their long term EU markets.
Japan continues to be a solid growth driver for the company. With its partnership with Toshiba and Sharp, Japan has accounted to 28% of shipments in the past contributing good long term revenue for the company. According to the latest updates, SunPower has entered to some amendment to extend its partnership with Toshiba till 2018. This is expected to be a positive material market for the company in the future.
Conclusion
Hence, SunPower is making good progress in a number of areas. Hence, investors can consider this company for the long run.
