Why SunPower's Shares Went Dark
Aug 9th 2012 7:25PM
Updated Aug 9th 2012 7:26PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of solar manufacturer SunPower (NAS: SPWR) fell 10% today after the company released second-quarter earnings.
So what: The company actually beat earnings estimates by a wide margin in the second quarter with earnings per share reaching $0.08, well above the $0.09 loss analysts expected. But outlook was weaker than expected, leading to the drop.
Management now expects full-year revenue to be between $2.6 billion and $2.8 billion, a $200 million reduction on the top end. In the third quarter, the company expects to lose between $0.05 and $0.20, versus the penny profit analysts expected.
Now what: The reduced revenue was actually in line with estimates of $2.7 billion from analysts, but this was clearly the focus today. Management actually said that full-year adjusted earnings would be break-even or better, topping estimates of a $0.10 loss, but the third quarter will be significantly weaker than the fourth because of revenue recognition rules.
If you're bullish, you could take positive points from the report, and if you're bearish, the reduced guidance is what you'll be hanging your hat on today. Clearly the bears are taking over today, but I thought the second-quarter numbers were encouraging enough to stay long with for a (long-)long-term horizon.
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The article Why SunPower's Shares Went Dark originally appeared on Fool.com.Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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