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Guidance Sends SunPower Corporation (NASDAQ:SPWR) Stock Reeling

SunPower Corporation (NASDAQ:SPWR)

SunPower Corporation (NASDAQ:SPWR)

SunPower Corporation (NASDAQ:SPWR) stock price is dropping fast. The market is reacting negatively to the solar company’s Q2 2017 financial report, released yesterday after the market closed. On Tuesday SPWR stock closed at $11.39 and quickly began trading in the $10 handle after the financial release and a brief trading halt. This morning the shares gapped down to open at $10.50 and are trading around $9.20 as of 10:45 AM EST. $9.19 is the inter-day low so far. Volume for the solar company is extremely heavy – SPWR shares are on pace to end over six times their daily volume average. SPWR stock chart over the past two days:

SunPower Corporation (NASDAQ:SPWR)
Two Day Candlebar stock price chart for $SPWR

While SunPower Corporation (NASDAQ:SPWR) met the street’s expectations on revenues and earnings, its guidance stunned shareholders who then sent the stock down. Q2 revenues fell 15%, compared to the same period for FY2016, to $341.5 million. That led to a per share loss of (-$0.35). Observers had been expecting revenues around $312 million with a loss of (-$0.46) per share. However, what sent shares reeling was the company’s Q3 guidance that indicated revenues would come in between $320 – $370 million. That figure was significantly lower than analyst estimates around $680 million. In the prior forecast, SunPower Corporation (NASDAQ:SPWR) indicated annual revenues around $2.6 billion. Yesterday the company lowered that projection to between $2.1 – $2.3 billion.

SunPower said that forecast “includes the impact of the company’s HoldCo asset strategy and revenue and timing deferrals due to real estate accounting, as well as the impact of charges related to the company’s restructuring initiatives.”

The financial performance is disappointing for shareholders that had experienced a 72% stock price gain YTD which was on the way to erasing the 21% loss for the year. According to unconfirmed reports, virtually all of SPWR shares are being borrowed for shorting purposes although the stock price seems to have some inter-day support round $9.20.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

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