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SunPower: Q2 Earnings Mixed – And Clean Energy Deal With Ford

SunPower (SPWRA) released a Q2 earnings picture and guidance that was decidedly mixed, though largely priced in. Revenue for the three months ended in June came in at $592m, up 56% on the year and above expectations of $586m. Meanwhile, the company reported a loss for the quarter broadly in line with expectations at 19 cents per share on a non-Gaap basis.

The backstory is of course as expected – market conditions in Germany and Italy were extremely adverse over the period, crushing margins. The Non-Gaap margin fell to 12.5% from 20.3% in the previous quarter. Looking forward, CEO Tom Werner was upbeat on the outlook for the company’s US Utility business. The fact that the company has a strong project pipeline in the Utility sector is of course well known but certainly allows a decent amount of visibility with regard to future earnings.

In terms of forward guidance, the company lowered expectations a tad for Q3 but raised expectations for the full year. For the current quarter, SunPower expects to produce revenues of $700m to $750m, with an associated EPS range of 5 cents to 15 cents. That compares to analyst expectations of around $742m and 19 cents per share.

For 2011 as a whole, SunPower sees revenues in the $2.8bn to $2.95bn range, with associated earnings per share of  75 cents to $1.25. That tops previous expectations of $2.76 bn and 72 cents.

From the conference call, the key development in the quarter for SunPower has come as a result of the strategic investment made in the company by Total. As a result of the $1bn Total Credit Support Agreement  provided to the company, SunPower has been able to put in place a $771m Letter of Credit Facility to support the company’s balance sheet.

Since bankability is such a key factor in the economics of the industry, this should be a key benefit to SunPower.

Nevertheless, the outlook for the stock remains mixed, given the current drag on the solar sector and the uncertainty related to overall market conditions.

Finally, SunPower and Ford (F) have announced a partnership to provide solar-based clean energy for the Ford Focus EV. The technology involved will be unveiled Wednesday, August the 10th. This is unlikely to make much of a difference to the company’s total module shipments anytime soon. Nevertheless, it is a interesting step forward for both the Solar and EV industries.

Disclosure: I have no positions in SunPower or Ford.