Mixed Greens: SunPower result boosts solar optimism

America’s second-largest solar manufacturer, SunPower Corp, has reported a second quarter profit that soared past expectations, raised its earnings outlook and announced plans to invest in a major new factory, a move the company said signaled a turning point for the global solar market. The California-based (but majority French-owned, through energy giant Total) company reported on Wednesday a Q2 net income of $108.4 million, or 73 cents a share, compared with a net loss of $48.5 million, or 41 cents, a year earlier. Bloomberg reports it was expected to earn 14 cents a share, according to the average of four of its analyst estimates. Revenue climbed 1.3% to $657.1 million.

SunPower’s quarterly profit – it’s first in two years – has coincided with increased demand in key markets, says Bloomberg, including the US and Japan. The company plans to expand manufacturing capacity by more than 25 per cent. Reuters reports that Wall Street initially cheered the results, sending SunPower shares up in after-market trading, but the stock later reversed course to trade down 3 per cent at $US30.90. SunPower’s stock is up 466 per cent so far this year.

As MarketWatch reports, solar stocks overall have rallied recently, a market shift that has been attributed to greater visibility into future growth and potential earnings improvement. “The sector is easily outperforming the broader market in 2013,” says MarketWatch, “albeit shares still are trading far under their peak levels as falling prices and global oversupply have pressured the industry.”

SunPower appears to share this newly optimistic outlook, with the chief executive Tom Werner telling an interviewer the company sees “a very positive market across all geographies.” Currently, SunPower is building several major solar power plants in California, while also benefitting from strong demand in the US residential market. It is also gaining business in Japanese market, and has plans to build a 350MW solar cell factory in the Philippines that will come online in 2015.

A lifeline (or two) for Suntech?

Fallen solar star Suntech Power Holdings, the Chinese company whose main unit was forced into bankruptcy, is reportedly set to receive an equity investment of at least $150 million from state-backed enterprise Wuxi Guolian Development Group. Formerly the world’s biggest solar manufacturer, and employer of 200,000 staff, the company’s potential failure seems finally to have prompted state agencies to come to its rescue, after it failed to repay $541 million in bonds that matured in March. Bloomberg reports that the cash investment from Wuxi Guolian would support “a comprehensive rehabilitation and restructuring of the financial and operational affairs of” Suntech, according to a company statement. The support from Wuxi Guolian could also lead to combining other solar and related businesses it owns with Suntech, possibly as joint ventures, the panel maker said in a statement yesterday announcing it had received an investment letter of intent.

Meanwhile, separate reports are claiming that Shunfeng Photovoltaic International, a China-based solar manufacturer, has gained permission from Chinese authorities to acquire Suntech Power. The reports say Shunfeng will invest CNY3 billion to reorganise Suntech, and then another CNY2-3 billion to restructure the company’s operations. As well as its total debt of CNY10.7 billion (US$1.75 billion), Suntech is the owner of many PV patents and has a total annual PV module production capacity of over 2GWp, plus R&D centers and other assets.

Big wind boosts Infigen result

After a record-breaking month for Australian wind energy in August, ASX-listed renewables company Infigen Energy has reported a 15 per cent (year-on-year) increase in Australian wind energy production as part of its first quarter 2014 results. Australian wind energy contributed 491GWh to a 1,009GWh total – a 7 per cent (63GWh) increase in whole group energy production in Q1 FY2014 from the previous corresponding period (pcp). Group revenue rose 13 per cent on the same time last year to $A71.3 million, again boosted by Australian revenue, which rose 14 per cent to $46 million. US revenue fell 2 per cent to $US23.2 million.

In its ASX results release, Infigen attributed the quarter’s 65GWh increase in Australian energy production to “very strong production in August 2013 and generally better wind conditions across all sites (except Alinta wind farm).” It said that the $5.6 million increase in Australian revenue for Q1 FY14 reflected higher production and higher merchant electricity prices partially offset by lower large-scale generation certificate prices.