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SunPower in 1H15: Why Revenues Were Subdued

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Installations

Just like in 2Q15, SunPower’s (SPWR) total installations considered toward revenues in 1H15 fell drastically. While the company deployed 659 megawatts, or MW, of solar panels in 1H15, the company only considered 413 MW for the purpose of revenue calculation, as some of the total had already been accounted for in previous quarters. SPWR accounted for a substantial portion of revenue related to some large projects by the end of 2014 (639 MW in 2Q14), leading to the shortfall this quarter.

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What’s more, revenues were lower because of a decline in component sales. A weaker Japanese yen led to lower sales of the company’s products in Japan. Out of 413 MW, residential, commercial, and power plant segments accounted for 143 MW (171 MW in 2Q14), 65 MW (88 MW in 2Q14), and 205 MW (381 MW in 2Q14), respectively.

Revenues

SunPower’s power plant segment reported revenues of $402.3 million in 1H15 against $717.9 million in 1H14. Revenues from the residential segment in 1H15 stood at $307.5 million versus $320.9 million in 1H14. Meanwhile, the commercial segment came in at $112 million as opposed to $161.6 million in 1H14. The company reported overall revenues of $821.9 million in 1H15 compared to $1,200.3 million in 1H14, representing a drop of over 30%.

Major customers

Berkshire Hathaway (BRK-B)–owned MidAmerican Energy was SunPower’s biggest customer in 2Q15 and 1H15, accounting for 15% and 25% of total revenues, respectively. The company executed the 579 MW Solar Star Project in California for MidAmerican Energy—its biggest solar power project in the US so far.

SunPower (SPWR) is a key component of the Guggenheim Solar ETF (TAN) and accounts for 5.1% of the fund’s total holdings. FirstSolar (FSLR), SolarCity (SCTY), and SunEdison (SUNE) respectively account for 8%, 7.2%, and 5.6% of the fund’s total holdings.

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