SunPower Sees Q2 Rev $590M-$595M; Cuts Q2 EPS to $(0.19)-$(0.20)

SunPower Corp. SPWRA today announced preliminary results for its fiscal second-quarter ended July 3, 2011. For the 2011 second-quarter, SunPower expects revenue to be in the range of approximately $590 million to $595 million, in line with its previous outlook of $550 million to $600 million. The company now expects its second-quarter non-GAAP gross margin to be in the range of approximately 12 percent to 13 percent, compared to its previously announced outlook of 15 percent to 17 percent. The company also expects its non-GAAP earnings per share for the quarter to be a loss of approximately ($0.19) to ($0.20) from its previous outlook of ($0.05) to $0.10 per share. Preliminary second quarter results reflect a shift in product mix related to market conditions in Germany and recent policy changes in Italy. On a GAAP basis, the company expects gross margin to be in the range of approximately 3 percent to 4 percent and a GAAP loss per share of approximately ($1.50) to ($1.55). Preliminary GAAP financial results include one-time pre-tax charges totaling approximately $75 million, including $29.3 million related to the company's panel reallocation strategy, $13.1 million in expenses related to the Total tender offer, and $32.5 million related to the write-down of third-party inventory and costs associated with the termination of third-party cell supply contracts. "While we met our revenue goals for the second quarter, our gross margin and bottom line performance was impacted by market conditions in Germany and Italy," said Tom Werner, SunPower president and CEO. "Despite these challenges, we successfully reduced inventory quarter over quarter and have begun the process of cancelling above-market third-party cell contracts. In addition, we continue to execute on our accelerated cost reduction roadmap and are ahead of our original plan. With the closure of the Total transaction, we commenced negotiations with banks to effectively utilize our $1 billion credit support agreement and expect to enter into new and more flexible credit facilities shortly. With continued strong demand for our high-efficiency systems and our partnership with Total, we are poised to gain share profitably."