SunPower (ticker: SPWR), a leading solar panel company, saw its stock prices drop on Wednesday following a downward revision of its full-year forecast. The company attributed this revision to a more significant decline in demand than previously anticipated, particularly in certain regions during the latest quarter.
Revised Financial Projections
SunPower reported its preliminary financial results on Wednesday, highlighting a projected full-year net loss between $70 million and $90 million. This is a significant increase compared to its previous forecast of a net loss between $1 million and $31 million.
Additionally, the company revised its full-year adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization) forecast. The new projection stands at $55 million to $75 million, representing a decrease of over 50% from its previous guidance range of $125 million to $155 million, which was provided in May.
Decline in Customer Growth Outlook
Apart from the financial revisions, SunPower also lowered its full-year customer growth outlook. The company now expects to add 70,000 to 90,000 residential customers in 2023, compared to its earlier forecast of 90,000 to 110,000 customers. Furthermore, the estimated residential adjusted Ebitda per customer has been revised downward to a range of $1,450 to $1,650 for the year, as opposed to the prior guidance of $2,450 to $2,900.
Share Price Reacts
The announcement had an immediate impact on SunPower’s stock prices. On Wednesday, shares tumbled by 12% to $9.83 – the largest single-day percentage decrease since May 2022, according to FactSet. Year-to-date, the stock has dropped by 45%.
In conclusion, SunPower’s revised full-year guidance reflects a more challenging business environment than expected, with a substantial decline in demand and a consequent impact on financial performance. The company’s stock price reflects investors’ concerns regarding these revised projections.
Solar Stock Market Update
SunPower’s Weaker Outlook Impacts Other Solar Stocks
Several solar stocks faced a decline in the market following SunPower’s weaker outlook on Wednesday. First Solar (FSLR) fell by 1.3%, SunRun (RUN) declined by 1.5%, Enphase Energy (ENPH) decreased by 3.5%, and SolarEdge Technologies (SEDG) experienced a decrease of 3%.
Preliminary Second-Quarter Results
SunPower provided their preliminary second-quarter results on Wednesday. They expect to post a net loss of $30 million for the period. While the company’s revenue grew by 11% year over year to $464 million in the quarter, it fell noticeably short of the current consensus analyst estimate of $492.1 million.
Second-Quarter Earnings Report
SunPower is scheduled to report its official second-quarter results on August 1st.
CEO’s Statement on Weakening Demand
Chief Executive Peter Faricy commented on the weakening demand in the second quarter, particularly in the Southeast and Southwest regions. He attributed this decline to macroeconomic uncertainty and higher interest rates, which have resulted in a slowdown in their lead generation and sales bookings.
Measures to Improve Efficiency
Faricy mentioned that the company plans to reduce labor costs and implement additional measures to improve operational efficiency across all departments. Despite the challenges, SunPower has observed improvements in sales growth during June and July.
With these developments, investors will closely monitor SunPower’s second-quarter results to gain further insights into the company’s financial performance.