SunPower Corporation (SPWR) Rises on Higher Fourth Quarter Earnings
Founded in 1985, SunPower designs, manufactures and supplies solar panels and solar systems to residential, commercial, government and utility customers.
Shares of San Jose, California, based SunPower Corporation (SPWR) were up sharply on Tuesday, rising $5.00 per share, up 17.99%, to close at 32.80 on volume of 12,924,266 shares. The company reported a net profit of $134.7 million for the fourth quarter, beating market expectations.
The company reported earnings of $134.7 million for the fourth quarter, or $.83 per share. Adjusted for one-time gains and cost, earnings came in at $.26 per share, beating analysts estimate of $.25 per share. Revenue for the quarter also exceeded analysts expectations, coming in at $1.16 billion, against expected revenues of $610.1 million.
For all of 2014, SunPower reported a net profit of $245.9 million, or $1.55 per share, and revenue of $3.03 billion.
Forward guidance projected offers a less encouraging view. The company is projecting first quarter revenues to come in at between $420 million and $470 million, against analysts expectations of $588.4 million. The company also expects net income to come in at between $.05 and $.15 per share.
The negative forward guidance however was more than offset by the announcement on Monday that the company plans to form a publicly traded yield company with Tempe, Arizona, based First Solar, Inc. (FSLR). The two companies are reportedly in advanced negotiations on the yield company (referred to as a "yieldco") that would own and operate solar powered plants that will generate revenues that will be paid out to investors as dividends. The companies will use money generated by the yieldco to fund development of new power plants.
Founded in 1999, First Solar, Inc. designs, manufactures and markets photovoltaic solar power systems and solar modules with an advanced thin-film semiconductor technology.
First Solar's stock closed up on Tuesday, rising $5.06, or 10.19%, to close at $54.70 on news of the yieldco, as well as a favorable earnings report for the fourth quarter. Net income was reported at $192 million, or $1.89 per share, nearly tripling the $65.3 million, or $.64 per share from the same period a year earlier. Revenues also increased to $1.01 billion for the quarter, up 31% from the prior year.
Yieldcos are publicly traded companies that hold power plants and pay regular dividends to their shareholders. They are similar to master limited partnerships, or MLP's, and real estate investment trusts, or REIT's. They are seen as a significant development in the solar power industry, and one that is rapidly spreading throughout the industry as other companies launch similar joint ventures. Investors have responded favorably to such arrangements as they are seen as creating a lower risk profile.
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More on the SunPower - First Solar yieldco.
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