SunPower's Cloudy Results: Fool by Numbers

On Oct. 18, SunPower (Nasdaq: SPWR  ) released third-quarter earnings for the period ended Sept. 30.

• The good news? Revenue increased 258.6% year over year, and 34.9% sequentially. According to CEO Tom Werner, "The overall solar business environment continues to be characterized by rapid and dynamic growth."
• The bad news? Dilution ran hot over the past year, with the diluted share count rising 11.8%, while operating income rose only 5.5% year over year.
• SunPower is rated three stars in Motley Fool CAPS, our investing intelligence community. Meanwhile, Rule Breakers selection Suntech Power (NYSE: STP  ) has earned a five-star rating.

(Figures in millions, except per-share data.)

Income Statement Highlights

	Q3 2007	Q3 2006	Change
Sales	$234.3	$65.3	258.6%
Net Profit	$8.4	$9.6	(11.9%)
EPS	$0.10	$0.13	(23.1%)
Diluted Shares	82.6	73.9	11.8%

Get back to basics with the income statement.

Margin Checkup

	Q3 2007	Q3 2006	Change*
Gross Margin	16.4%	23.2%	(6.9)
Operating Margin	2.9%	9.9%	(7.0)
Net Margin	3.6%	14.6%	(11.0)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets	Q3 2007	Q3 2006	Change
Cash + ST Invest.	$454.5	$273.6	66.1%
Accounts Rec.	$82.8	$47.1	75.9%
Inventory	$99.9	$26.1	283.4%

Liabilities	Q3 2007	Q3 2006	Change
Accounts Payable	$102.8	$35.0	194.2%
Long-Term Debt	$425.0	$0.0	N/A

The balance sheet reflects the company's health.

Cash Flow Highlights
The company provided no cash flow statement, leaving investors in the dark.

Free cash flow is a Fool's best friend.

Related Foolishness:

• SunPower Keeps Burning: Fool by Numbers
• Silicon, Strings, and Solar Cells
• Change at Energy Conversion Devices