What happened
Maxeon Solar Technologies (MAXN 5.92%), the primary producer of solar panels for solar company SunPower, saw its stock price crash 27.5% through 9:50 a.m. ET, after reporting mixed earnings last night.
Analysts had forecast Maxeon would lose $0.08 per diluted share in its fiscal second-quarter 2023 report for the period ended July 2, and Maxeon beat that estimate, reporting a loss of only $0.03 per share. However, Maxeon's sales of $348.4 million fell well short of analysts' predicted sales of $372.6 million.
NASDAQ: MAXN
Key Data Points
So what
Maxeon's $0.03-per-share loss was a huge improvement over the $2.15 per share the company lost one year ago. And $348.4 million in sales still worked out to 46% growth year over year, a result that CEO Bill Mulligan called "solid." Plus, Maxeon is making moves to keep growing in the future, announcing it will build a U.S. solar cell-and-module factory in Albuquerque, New Mexico.
The question is, as Maxeon expands its ability to supply solar panels, will there be demand there to meet that supply?
Adding color to the bare numbers of the report, Mulligan noted that demand for rooftop solar panels "weakened significantly in late-Q2 due to the combined effect of higher interest rates, the impact of policy disruption in California, and significant channel inventory industrywide," resulting in weaker than expected solar shipments and revenue. Maxeon expects this trend to continue through the third quarter, and even through the fourth quarter, and is accordingly shifting its sales focus away from trying to sell rooftop systems and toward selling to utilities and factories.
Now what
This tactical shift may mitigate Maxeon's problems, but it won't solve them entirely. Management forecasts that sales in Q3 will range from only $280 million to $320 million -- all well below Wall Street's forecast of $395 million. Gross profits will be limited to less than $40 million in the quarter, less than projected operating costs, with the result that Maxeon is basically guaranteed to report another loss this coming quarter.
Similarly for the year, Maxeon says sales will range from $1.25 billion to $1.35 billion, whereas Wall Street wants to see the company report more than $1.5 billion in sales for fiscal 2023.
It's looking like today's sell-off may be only the beginning of some tough times -- both for Maxeon, and for its main customer SunPower as well.
