By Matt Daily
NEW YORK, Nov 18 (Reuters) - Solar power maker SunPower Corp issued a 2011 revenue forecast that fell short of Wall Street forecasts, but the company said it was banking on its vast network of dealers and high efficiency panels to boost its profits.
SunPower also is testing new solar concentrating equipment that would be used to focus the sun's rays on the company's high-efficiency solar cells that would increase the electricity output sevenfold.
The move represents a bid by SunPower to branch out into new areas that could speed its entry into the market for utility-scale power plants, a business that is expected to generate more than half its 2011 sales volumes.
'This is a game changer,' Howard Wenger, president of SunPower's utility and power plants business told an analysts' meeting on Thursday. 'Potentially we could see the benefits of this as early as 2012.'
Like its larger rival First Solar, SunPower has moved enter the engineering and construction market for solar power plants.
That power plant business has lower profit margins than solely selling modules to distributors and other project developers, but creates a direct channel for the company's growing output of solar equipment and gives SunPower more certainty around pricing.
The San Jose, California-based company forecast 2011 revenues would rise as much as 30 percent from the mid-point of its 2010 forecast to between $2.65 billion to $2.85 billion. That forecast fell short of analysts' average forecast of $2.87 billion, according to Thomson Reuters I/B/E/S.
The company also forecast 2011 earnings per share excluding one-time items between $1.75 and $2.05, in line with analysts' average forecast of $1.86 per share.
SunPower's high efficiency panels typically sell at a premium of 20 to 40 percent to its Chinese competitors, who have rapidly grown their production and are winning market share in renewable markets in Europe and the United States.
Last week, SunPower's competitor Suntech Power Holdings said it had surpassed SunPower as the largest supplier in North America, a market that is far smaller than the market in Germany, but which is poised to become the world leader in the coming years.
ATTACK MODE
SunPower has moved to expand its output and its network of dealers, which is expected to reach 1,500 around the world, giving it a global reach to sell its modules.
'This management team is in attack mode,' Chief Executive Tom Werner told the meeting.
Prices for solar modules are expected to decline in 2011, pressured by a sharp increase in global manufacturing capacity as well as cuts to subsidies in key European markets.
Last week, SunPower cut its fourth quarter profit forecast, reflecting pressure on margins.
The company, which announced the sale of a 15-megawatt solar plant in Italy, has said it expects to sell its Montalto plant there by year-end.
The company has launched a bond sale to finance construction of that plant in a new effort to tap new markets to pay for solar developments.
In an interview following the analysts' meeting, Werner told Reuters he expected a project finance market for solar plants would also develop in the United States once the industry increased the size of the plants
'It will be in the U.S. You just have to have a large enough project,' he said.
Shares in SunPower slipped 0.8 percent to close at $13.20 per share on the NASDAQ,
That brought its year-to-date decline to 44 percent, far worse than the 11 percent drop in the the WilderHill Clean Energy index. (matt.daily@thomsonreuters.com; Reuters Messaging: matt.daily.reuters.com@reuters.net; +1 646 223 6121) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
NEW YORK, Nov 18 (Reuters) - Solar power maker SunPower Corp issued a 2011 revenue forecast that fell short of Wall Street forecasts, but the company said it was banking on its vast network of dealers and high efficiency panels to boost its profits.
SunPower also is testing new solar concentrating equipment that would be used to focus the sun's rays on the company's high-efficiency solar cells that would increase the electricity output sevenfold.
The move represents a bid by SunPower to branch out into new areas that could speed its entry into the market for utility-scale power plants, a business that is expected to generate more than half its 2011 sales volumes.
'This is a game changer,' Howard Wenger, president of SunPower's utility and power plants business told an analysts' meeting on Thursday. 'Potentially we could see the benefits of this as early as 2012.'
Like its larger rival First Solar, SunPower has moved enter the engineering and construction market for solar power plants.
That power plant business has lower profit margins than solely selling modules to distributors and other project developers, but creates a direct channel for the company's growing output of solar equipment and gives SunPower more certainty around pricing.
The San Jose, California-based company forecast 2011 revenues would rise as much as 30 percent from the mid-point of its 2010 forecast to between $2.65 billion to $2.85 billion. That forecast fell short of analysts' average forecast of $2.87 billion, according to Thomson Reuters I/B/E/S.
The company also forecast 2011 earnings per share excluding one-time items between $1.75 and $2.05, in line with analysts' average forecast of $1.86 per share.
SunPower's high efficiency panels typically sell at a premium of 20 to 40 percent to its Chinese competitors, who have rapidly grown their production and are winning market share in renewable markets in Europe and the United States.
Last week, SunPower's competitor Suntech Power Holdings said it had surpassed SunPower as the largest supplier in North America, a market that is far smaller than the market in Germany, but which is poised to become the world leader in the coming years.
ATTACK MODE
SunPower has moved to expand its output and its network of dealers, which is expected to reach 1,500 around the world, giving it a global reach to sell its modules.
'This management team is in attack mode,' Chief Executive Tom Werner told the meeting.
Prices for solar modules are expected to decline in 2011, pressured by a sharp increase in global manufacturing capacity as well as cuts to subsidies in key European markets.
Last week, SunPower cut its fourth quarter profit forecast, reflecting pressure on margins.
The company, which announced the sale of a 15-megawatt solar plant in Italy, has said it expects to sell its Montalto plant there by year-end.
The company has launched a bond sale to finance construction of that plant in a new effort to tap new markets to pay for solar developments.
In an interview following the analysts' meeting, Werner told Reuters he expected a project finance market for solar plants would also develop in the United States once the industry increased the size of the plants
'It will be in the U.S. You just have to have a large enough project,' he said.
Shares in SunPower slipped 0.8 percent to close at $13.20 per share on the NASDAQ,
That brought its year-to-date decline to 44 percent, far worse than the 11 percent drop in the the WilderHill Clean Energy index. (matt.daily@thomsonreuters.com; Reuters Messaging: matt.daily.reuters.com@reuters.net; +1 646 223 6121) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.