SunPower Sales for Rooftop Systems Drive Quarterly Profit

SunPower Corp., the second-largest U.S. solar manufacturer, posted fourth-quarter profit that beat expectations as demand from the rooftop power market surged.

About 40 percent of the company’s sales were for residential and commercial systems, including almost all of the panels sold in Japan, Chief Executive Officer Tom Werner said in an interview yesterday.

Those will remain important markets as demand wanes for utility-scale projects in the U.S. Many of the large projects nearing completion now were sold to utilities to meet state requirements, known as renewable portfolio standards, for the use of clean energy. Few new ones are planned, he said.

“The U.S. utility market is in transition,” he said. “We had the RPS cycle of business and that’s being built out through the next few years.”

The utility market may slow until prices for solar power become competitive with fossil fuels. That will spur an “economics driven” surge for photovoltaic panels. “There will be another growth spurt in American utilities,” he said. “It’s a few years off, but it will happen.”

U.S. residential solar power has grown in 14 of the past 15 quarters through September, according to a December report from the Solar Energy Industries Association. Installations in the first nine months of last year were 49 percent higher than the same period a year earlier.

Analyst Estimates

SunPower’s net income in the fourth quarter was $22.3 million, or 15 cents a share, compared with a net loss of $144.8 million, or $1.22, a year earlier, the San Jose, California-based company said in a statement.

Including revenue for some utility power projects, per-share earnings of 47 cents beat the 28-cent average of 13 estimates compiled by Bloomberg. Sales declined 6 percent $638.1 million.

A growing portion of SunPower’s sales is coming from the downstream “sweet spot,” the surging market for U.S. residential and commercial projects, Rob Stone, an analyst at Cowen & Co. in Boston, said in a Feb. 10 research note.

With demand from U.S. utilities peaking, SunPower is expanding its presence in other regions, Stone said.

“Relationships with Toshiba and Total should help build market share in Japan, Europe and emerging markets,” he said in the note.

About 24 percent of fourth-quarter shipments went to Japan. SunPower began supplying panels to Toshiba Corp. in 2010. Total SA, the French oil company, owns 65 percent of the solar manufacturer.

First Solar Inc. is the largest U.S. solar manufacturer.

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