SunPower Corp. rebounded from its first quarterly loss in two years as the second-largest U.S. solar-panel maker shifted its power-plant strategy.
Net income in the second quarter was $6.5 million for the second quarter, or 4 cents a share, down from $14.1 million, or 9 cents, a year earlier, San Jose, California-based SunPower said Tuesday in a statement. Excluding some items, it reported a profit of 18 cents a share, exceeding the 16-cent average of nine estimates compiled by Bloomberg.
Besides making panels, SunPower also develops and sells large solar farms. It’s now shifting that strategy, retaining projects longer before selling them to a joint venture it formed this year with First Solar Inc., the biggest U.S. solar manufacturer. Chief Executive Officer Tom Werner said he doesn’t expect to sell many solar farms to the new company until the fourth quarter.
“We transitioned in the second quarter from a company without a yieldco to one that did,” Werner said in an interview Tuesday. “That means you’ll keep projects on your balance sheet.”
The new company, 8Point3 Energy Partners LP, is structured as a yieldco, essentially a holding company for a portfolio of operating power plants. Developers always need capital for new projects, so they create a separate, publicly traded unit to buy the assets once they’re completed. The yieldco’s function is to collect revenue from selling electricity, helping fund the purchase of more power plants.
Holding onto projects is eating into SunPower’s revenue, leading last quarter to its first loss since 2013. Sales in the second quarter fell to $381 million from $507.9 million a year earlier. That followed a 36 percent decline in sales in the first quarter.
The transition is making it tough for analysts to evaluate SunPower’s business.
“This quarter wasn’t a clean sample of the company’s business,” said Pavel Molchanov, analyst at Raymond James Financial Inc. in Houston. That’s largely because of the “unusual complexity” surrounding 8Point3, which sold shares in an initial public offering last month.