Please ensure Javascript is enabled for purposes of website accessibility

Why SunPower Corp. Shares Plunged 12% Today

By Travis Hoium - Feb 15, 2018 at 11:57AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Fourth-quarter earnings were fine, but the solar manufacturer's 2018 guidance wasn't what investors wanted to see.

What happened 

Shares of solar manufacturer SunPower Corp. (SPWR -1.01%) fell as much as 12.4% in trading Thursday morning after it reported fourth-quarter earnings and high-level 2018 guidance. The guidance figures left a lot to be desired for investors, and as of 11:54 a.m. EST, shares were still down 9% on the day. 

So what

SunPower's Q4 revenue was $658.1 million, and its net loss was a whopping $568.7 million, or $4.07 per share -- though that was driven by a one-time charge. On a non-GAAP basis, revenue was $824.0 million and earnings were $35.8 million, or $0.25 per share, which beat the Wall Street consensus estimate of $0.11 per share. 

Solar carport with cars under it.

Image source: SunPower.

SunPower also took a $473.7 million charge related to the anticipated sale of lease assets. The company will sell all the residential leases on its balance sheet; it expects to collect $200 million in cash and reduce debt by $436 million as a result. 

What traders seem to have focused on today was the 2018 guidance for revenue in the $1.8 billion to $2.2 billion range, below analysts' consensus estimate of $2.4 billion. Management also said adjusted EBITDA would be positive, but didn't give gross margin guidance for the year, so there's uncertainty in the operating metrics for investors. 

Now what

SunPower is dealing with a transition to a business model more focused on component sales rather than system development, which is wreaking havoc on its balance sheet and income statement today. But the focus is on reducing debt and simplifying the business long term. On that front, the company is making progress. However, given the bumps it's liable to face along the way, 2018 presents enough uncertainty that investors are jumping ship today. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

SunPower Corporation Stock Quote
SunPower Corporation
$15.65 (-1.01%) $0.16

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.