SunPower’s (SPWR) selling, general, and administrative expenses, or SG&A, increased to $81.5 million, or 21% of sales, in 2Q15. In 2Q14, SG&A was $71.5 million, or 14% of sales. The spike in SG&A expenses was primarily due to the formation and IPO (initial public offering) of its joint solar yieldco, 8point3 Energy (CAFD). The increase in SG&A was more than offset by gains on the transfer of assets to CAFD. What’s more, interest costs dropped to $8.5 million in 2Q15 from $16.3 million in 2Q14, as the company refinanced its high-cost debt with low-cost debt in late fiscal 2014.
Net income drops
In spite of lower interest expenses, SunPower’s net income dropped in 2Q15 due to less gross profit. The company’s net income for 2Q15 came in at $6.5 million, down from 2Q14’s $14.1 million. On a per share basis, the firm’s net income translates into $0.04 in 2Q15 against $0.09 in 2Q14.
In comparison, SolarCity’s (SCTY) losses narrowed to $22.4 million in 2Q15 from $47.7 million in 2Q14. For its part, SunEdison (SUNE) reported a spike in net losses to $263 million in 2Q15 from $41 million in 2Q14. FirstSolar (FSLR) saw net income rise to $94.5 million in 2Q15 from $4.5 million in 2Q14.
While SPWR remained profitable, it burned a substantial amount of cash during 2Q15. Operating cash burn came in at $212 million in 2Q15 against cash burn of $50.5 million in 2Q14. The additional cash burn was a result of a substantial increase in project assets. These were primarily related to the company’s Quinto Solar Project (TAN) in California that’s expected to be completed this year. The company received $341.2 million from the asset transfer to 8point3 Energy during the quarter.