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SunPower First-Quarter Loss Narrows on Installations

May 2 (Bloomberg) -- SunPower Corp., the second-largest U.S. solar manufacturer, said its first-quarter loss narrowed and sales exceeded company estimates as project installations increased.

The net loss narrowed to $54.7 million, or 46 cents a share, from $74.5 million, or 67 cents, a year earlier, San Jose, California-based SunPower said in a statement today. The company, which hasn’t reported a profit since 2010, was expected to lose 32 cents a share, the average of seven analysts’ estimates compiled by Bloomberg.

Sales of $635.4 million exceeded the company’s February forecast of $450 million to $525 million. Global oversupply of solar products and waning government support for renewable energy dragged down prices for photovoltaic panels 31 percent last year to 64 cents a watt. SunPower and other panel makers have turned to building solar projects that use output to help boost demand.

SunPower invested downstream ahead of its peers and that strategy is paying off, Tom Werner, president and chief executive officer said today in an interview. “We’ve gone from selling hardware to selling energy.”

Werner doesn’t see the large, struggling Chinese solar manufacturers as the company’s competitors, he said. “More than half of our revenue is in the form of a lease and power purchase agreements.”

Margins

SunPower said gross margin was 9.3 percent, compared to an average of negative 3.2 percent among peers, according to data compiled by Bloomberg. The company’s gross margin exceeds that of its peers, Ben Kallo, an analyst at Robert W Baird & Co. in San Francisco, said in an interview before results were released.

“If I look at half the Chinese module manufacturers they’re reporting low single digit gross margins,” Kallo said. “They have a good balance sheet comparatively.”

SunPower rose 18 percent to close at $15.29 in New York, the highest since Aug. 17, 2011. Shares have risen more than 172 percent since the start of the year.

SunPower, majority-owned by the French oil company Total SA, said April 26 that it began construction on two Antelope Vally solar farms totaling 579 megawatts in Los Angeles and Kern counties. They will provide enough power for 400,000 California homes and will sell electricity to Edison International’s Southern California Edison utility under long-term contracts.

To contact the reporter on this story: Ehren Goossens in New York at egoossens1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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