What happened 

Shares of SunPower Corporation (NASDAQ:SPWR) jumped as much as 20.1% on Thursday after the company reported third-quarter results. The company posted a surprise profit on a non-GAAP basis and is already building out its next manufacturing plant. Investors liked what they saw, and at 1:20 p.m. EDT shares were still up 14.2%. 

So what

Year-over-year comparisons in this case are meaningless because project sales make results very choppy. But revenue of $477.2 million, a non-GAAP gross margin of 12.8%, and non-GAAP earnings per share of $0.21 crushed consensus estimates. Analysts were expecting revenue of only $368.2 million and a loss of $0.39 per share. 

Carport with solar panels and vehicles underneath.

Image source: SunPower.

The one disappointment was that revenue guidance for 2017 was compressed to the low end of the previous guidance, to between $2.1 billion and $2.15 billion on a non-GAAP basis. Management also gave a specific range for full-year adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $165 million to $190 million, so that may be enough for investors to overlook the light revenue guidance. 

Now what

SunPower has been remaking itself this year to be more focused on distributed solar projects at homes and businesses around the world. Its products are becoming more popular -- even energy storage in commercial applications is picking up with $60 million in the pipeline. The company expects as much as half of its commercial sales to include energy storage in 2018, giving it a leading position in the market. 

There also appears to be some traction in the SunPower Solutions business, which supplies components to power plants. Bookings have been 500 MW so far this year and should accelerate as manufacturing in China ramps up. 

Management was optimistic that SunPower would be sustainably profitable in the second half of 2018, which is also when it expects to start producing its next-generation solar panel. Equipment has already been ordered and will be installed at the Fab 3 solar-cell fabrication facility next year. When that takes place, this stock could really take off given the leading position SunPower has in distributed solar today. 

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