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In March, First Solar (NASDAQ: FSLR ) shares jumped more than 20% in a single day in reaction to guidance issued during its analyst meeting. One of the major drivers was the company's initiative to expand its international presence.
That makes a lot of sense, as nearly 85% of First Solar's 2013 revenue was generated domestically. And high-growth, high-margin markets such as Japan, projected to be the world's No. 2 solar market in 2014, offer real opportunity.
But First Solar will be playing catch-up in markets like Japan and China, where SunPower (NASDAQ: SPWR ) already has a presence.
Established global presence
In 2013, SunPower generated more than 15% of its revenue from the high-growth Asia-Pacific (APAC) region, nearly doubling that region's share just two years prior.
What's more, APAC generates consistently strong gross margins for SunPower. So, if trends hold, this region will continue to bolster the company's gross margin that has already returned to 2010 levels.
And Q1 2014 numbers suggest SunPower may still be building momentum here: The region accounted for nearly 22% of the company's first-quarter shipments. Much of the growth, particularly in Japan, has come from the residential (or rooftop) market, where SunPower's high efficiency panels are a natural fit in space-constrained settings.
Perhaps more importantly, SunPower announced that it executed an agreement to supply 70 megawatts for projects in Inner Mongolia (with plans to supply up to 120 MW). This signals an important toehold in the Chinese market that other North American and European companies have so far failed to gain, due largely to protectionist measures aimed at strengthening China's own domestic solar companies.
Finally, SunPower has pointed to strengthening in its Europe-Middle East-Africa (EMEA) business, which has long represented a significant chunk of revenue. If the European market in particular continues to strengthen, SunPower will be well positioned in the world's top three non-U.S. markets (China, Japan, Europe). That bodes well for SunPower, which is already well positioned in the U.S., projected to be the No. 3 overall market in 2014.
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