San Jose, California United StatesSunPower Corporation today announced its second-quarter and 2011 fiscal year financial outlook.
Revenues for Q2 are expected between $500-600M and $2.80-2.95bn or full year 2011. Non GAAP gross margin is projected at 15-17% for Q2 and 17-19% fo the full year."Recognized" MW are projected at between 175-200MW in Q3 and 875-920MW for the full year.
“The changes to Italian solar policy this year have had a significant impact on the global solar market,” said Tom Werner, SunPower president and CEO. “In response, we rebalanced our product allocation in Italy away from power plants and toward our European residential and commercial (R&C) business where demand remains strong. The ability to reallocate our product in the face of market changes is a key feature of SunPower’s vertically integrated, geographically diversified model. However, systems sold through our R&C channel yield less profit per watt than systems deployed in self-developed power plant projects, as reflected in our Q2 outlook. In addition, we expect the current global pricing pressure to persist through 2011 and, as a result, we are planning full-year 2011 non-GAAP gross margins to be in the range of 17% to 19%.
"The changes in global market conditions favor SunPower as we have both the flexibility to rebalance our allocation between downstream channels as well as the technology differentiation to sustain premium pricing compared to lower efficiency systems," continued Werner. "Italy's decision to focus market development on residential and commercial applications instead of large power plants is in line with the trend across Europe, playing to our strengths in the rooftop and carport markets. Our world-leading, high-efficiency solar systems maximize customers' returns, especially in area-constrained applications, positioning us to increase our share in these markets."
"To align with the reallocation of product, we are rebalancing resources to support the growth of our residential and commercial rooftop businesses," said Dennis Arriola, SunPower CFO. "We're taking aggressive steps to actively manage our manufacturing and operating expenses, including working with suppliers to modify contracts to reflect current market conditions. In addition, our 2011 outlook incorporates the efficient management of our balance sheet through production optimization and demand-driven inventory levels. These steps, along with the $1 billion credit support agreement with Total, position SunPower to gain market share profitably."
As a result of the changes to Italian solar policy, the company anticipates that its fiscal year 2011 GAAP results will be impacted by certain one-time, pre-tax charges of $14 million to $29 million related to its reallocation strategy, including $11 million to $21 million in the second quarter. In addition, the company expects its second quarter GAAP results to reflect $13 million to $15 million in pre-tax expenses related to the outstanding Total tender offer.
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