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Can SunPower Beat Analysts’ Expectations in 2Q16?

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Series overview

SunPower (SPWR) is expected to announce its 2Q16 earnings results on July 26, 2016, after market hours. In this series, we’ll look at analysts’ expectations for SunPower’s 2Q16 earnings. We’ll discuss factors that led analysts to arrive at these expectations. We’ll also look at the company’s 2016 guidance and the key indicators that investors should watch.

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SunPower’s stock performance

From its 1Q16 earning release on May 5, 2016, until July 7, 2016, SunPower’s stock price lost nearly 16% in value. Stock prices of other major solar companies such as Canadian Solar (CSIQ), First Solar (FSLR), and Trina Solar (TSL) followed a similar trend during the same period. Trina Solar (TSL) stock lost nearly 10% after SunPower’s 1Q16 results through July 7, 2016. Canadian Solar and First Solar lost nearly 8% and 15%, respectively.

However, SunEdison (SUNEQ) stock lost the most among SunPower’s peers. Company-specific reasons caused SunEdison’s stock price to fall by nearly 36% in the same period. On April 21, 2016, SunEdison filed for Chapter 11 bankruptcy protection.

The Guggenheim Solar ETF (TAN) tracks the broad-based solar market. It lost nearly 5% during the same period.

Developments after 1Q16

SunPower hit record high solar power panel efficiency for its X-series solar panel in 2Q16. According to the company’s press release on June 27, 2016, SunPower reached 24.1% efficiency. It surpassed the previous world record for the highest efficiency of a solar panel using silicon cells. Increased cell efficiency can help SunPower fit more watts in a given space and reduce the raw material cost.

On July 6, 2016, SunPower announced that the company sold the majority stake in its 102 MW (megawatt) Henrietta Solar Project in Kings County, California, to Southern Power (SO). Revenue from this transaction could be reflected in the company’s top line later in 2016.

On July 7, 2016, SunPower announced that it secured 76% of France’s ZNI Tender to provide 39.1 MW of solar photovoltaic technology. All of the projects awarded under the tender are expected to be operational by mid-2019.

In the next part of the series, let’s see how analysts rate SunPower.

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