SunPower had another profitable quarter and is looking to expand its cell capacity. (That is not a sentence we have had the pleasure of writing lately -- about any solar company.)
"2013 has been a very strong year for SunPower," said CEO Tom Werner on this afternoon's Q3 earnings call. The vertically integrated solar firm beat Q3 estimates on revenue and earnings per share. The firm had third-quarter GAAP income of $108.4 million on $657.1 million in revenue.
According to Werner, North America drove overall results along with strength in Japan and recovery in EMEA. What's more, the strengthening market environment has SunPower expanding its manufacturing capacity in the Philippines by 25 percent (or 350 megawatts). The capacity expansion will be internally funded, with the first silicon expected in the first half of 2015, and will bring total cell capacity to more than 1.8 gigawatts when fully ramped, according to the company.
Werner reported that SunPower has gained "a significant share of the Japanese rooftop market," with Japan accounting for 26 percent of Q3 volume, up 130 percent. The company also has a supply agreement for more than 90 megawatts of ground-mount power plants in Japan, as well as a custom product offering for the region.
SunPower also plays in residential solar leasing, with more than $855 million in lease financing raised over the last two years. Werner and the SunPower CFO spoke of more funding to come on this front, as well as third-party financing moving into the European Union -- albeit in a different form than in the U.S.
Werner noted that the firm was pleased with the passage of California's AB 327 and the Arizona decision to support net energy metering. He added that diamond saws have reduced silicon consumption to 4.2 grams per watt for the company's 135-micron-thick solar cells.
Other highlights:
- Construction of 579-megawatt Solar Star projects for MidAmerican Solar continues
- 70-megawatt merchant power plant in Chile with Total as partner
- North American commercial project pipeline greater than $1 billion
- All manufacturing facilities are operating at full capacity
Guidance
For Q4, SunPower expects GAAP revenue of $575 million to $625 million, gross margin of 17 percent to 19 percent, and net income (loss) per diluted share of ($0.10) to $0.10.
For fiscal year 2013, the company expects revenue of $2.45 billion to $2.50 billion, gross margin of 18 percent to 19 percent, and net income per diluted share of $0.45 to $0.65.
SunPower, by virtue of its high efficiency and vertical integration, is a bit of a one-off in the solar industry. But these results are good news for solar, demonstrating the sector's stabilizing and recovering markets.