SunPower Corporation (NASDAQ:SPWR) Completes Sale

SunPower Corporation (NASDAQ:SPWR)

Shares of SunPower Corporation (NASDAQ:SPWR) declined more than 6.9% in the last session after an announcement that the company had completed an asset sale transaction in Chile.

The stock pulled back 6.94% to end the regular trading session at $7.11 on a day characterized by low volume trading. As the market continued to digest the asset transaction announcement, SunPower moved up 0.14% in afterhours trading to close the day at $7.12.

The regular session losses and the after-hour’s session gains left SunPower up 7.6% since the beginning of the year and down 16.6% over the last 12 months. In the last 12 months, SunPower shares have dipped to a low of $5.84 and peaked at a high of $11.70.

SunPower Corporation (NASDAQ:SPWR)

Acquisition of switchyard

On September 25, SunPower Corporation (NASDAQ:SPWR) issued a press release stating that it had finalized the sale of the Don Héctor switchyard that links the 100-megawatt El Pelicano solar project with the Integrated Central System (SIC) of Chile.

The release said that the switchyard was acquired by Transelec S.A., the leading power transmission company in Chile. Financial details of the transaction weren’t disclosed, and this may have weighed on the stock. However, SunPower Corporation (NASDAQ:SPWR) and Transelec have undertaken investments worth $17.9 million.

Transelec is responsible for the transmission of power that lights up homes of 90% of Chileans who live between Arica and Chiloé. The company also owns 78% of the national power transmission lines in the Central Interconnected System (SIC), which is connected to the 100-megawatt El Pelicano solar project via the Don Héctor switchyard.

According to SunPower Corporation (NASDAQ:SPWR), the Don Héctor switchyard can be scaled to accommodate interconnection for future projects.

The Don Héctor lies 6.5 kilometers from the El Pelicano solar project. SPWR is developing the El Pelicano project in Chile’s La Higuera (Coquimbo Region). The project is expected to be operational by the end of 2017. When completed, the El Pelicano project will have a capacity to supply 300 gigawatt hours per year of energy. The project will serve Chile’s Metro de Santiago, the underground railway network of the city of Santiago.

Seeing value in solar power

SunPower Corporation (NASDAQ:SPWR) portrayed the acquisition of the Don Héctor switchyard by Transelec as demonstrating a view that Transelec sees value in investing in solar. Transelec sees the acquisition of Don Héctor switchyard as giving it the infrastructure necessary to transmit renewable energy as well as partake in the growth of Chile’s solar energy market.

The El Pelicano project consist of a solar power plant dubbed SunPower Oasis, which is billed as a fully-integrated, cost-effective solar deployment. SunPower Corporation (NASDAQ:SPWR) said that the SunPower Oasis features optimal land use and an efficient solar panel cleaning capability.

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: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Guidance Sends SunPower Corporation (NASDAQ:SPWR) Stock Reeling

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.

Don’t miss out! Stay informed on $SPWR and receive breaking news on other hot stocks by signing up for our free newsletter!

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.