What's Going On With Singapore-Based Maxeon Solar's Shares Today?

Singapore-based Maxeon Solar Technologies Ltd MAXN, which designs and manufactures Maxeon and SunPower brand solar panels, lowered its Q3 FY23 guidance. 

Outlook: The company reduced the guidance for Q3 revenues to $224 million-$229 million (from $280 million - $320 million) (consensus $316.2 million) and shipments to 622 to 632 megawatts (from 700 - 740 megawatts). 

Also, the company projects the outlook for Q3 adjusted EBITDA to shift downward by around $30 million (vs. guidance of $2 million - $12 million).

The company stated that its Q3 business operation was impacted by lowered shipments to its largest distributed generation (DG) customer in the U.S. and an industry-wide demand slowdown in the global DG markets.

"As disclosed in our last earnings call, our largest US DG customer breached their payment obligations under our current Master Supply Agreement (MSA) and we paused shipments in late July as a result. While this customer has recently made several payments on their outstanding balance and is now close to becoming current, we continue to pause our shipments and engage in good faith towards resolution of certain ongoing claims of breach under the MSA. We do not have visibility into how quickly such resolution can be achieved. It is our position that we have firm quantity and pricing contracts in place," said Bill Mulligan, CEO.

Restructure: The company has decided to re-engineer its IBC manufacturing capacity, boost DG business, and focus on its large-scale U.S. business.

MAXN now plans to convert its Maxeon 3 capacity in the Philippines to Maxeon 7 technology instead of refurbishing the Fab 5 facility in the country. 

This is projected to accelerate the market introduction of Maxeon 7 panels by several months and cut capital expenditures by about $100 million.

The company anticipates the restructuring initiative to result in a global headcount reduction of about 15%, with most of it expected to occur by the end of the year.

Price Action: MAXN shares are up 0.94% at $9.63 on the last check Tuesday.