What happened
Shares of SunPower (SPWR 5.85%) were down more than 17% as of 12:30 p.m. on Wednesday after the solar-power technology and energy provider released preliminary second-quarter numbers. The actual quarterly earnings are expected on Aug. 1. The stock is down more than 49% so far this year.
So what
SunPower also gave updated guidance. The biggest trigger for Wednesday's share decline was that the company lowered its earnings expectations for the year. Instead of predicting annual net income of between $52 million and $82 million, it now expects a net loss of between $70 million and $90 million in 2023. It also lowered its expected number of residential customers to between 70,000 and 90,000, down from an earlier forecast of between 90,000 and 110,000.
The company said the biggest reason for the expected decline is lower demand in the Southeast and Southwest, due to increased interest rates.
The company said it is responding to the lower demand by trimming its labor force as well as cutting its platform investment to a range of $50 million to $70 million for the year.
Now what
Not all the numbers were bad. The company did say it expected second-quarter revenue of $464 million, up 11% year over year. It also said it expects a second-quarter loss of $30 million, compared to the $5.2 million it lost in the same period last year.
The biggest concern, then, is that the company needs to rein in costs since it isn't growing revenue fast enough to erase its losses. It's worth noting that there is plenty of potential growth in the U.S. with only 4% of homes having solar photovoltaic systems now, but 15% should have them by 2030, according to the most recent Solar Energies Industries Association report.
