SunPower Corporation (NASDAQ:SPWR) reported a poor third-quarter report, sending SPWR stock plunging by three percent in after-hours trading, after dropping 14% throughout the day.
SunPower, the second-largest solar panel producer in the U.S., reported a loss of $40.5 million, or $0.29 a share, in the third quarter, narrowing a loss of $56.3 million, $0.41 a share a year ago. Sales, on the other hand, had quite a boost, reaching $729.0 million, compared with $380.0 million in the third quarter of 2015. Analysts polled by FactSet had expected SunPower to report adjusted earnings of $0.41 a share on sales of $786.0 million. The company expects a 2016 revenue of $2.43 billion to $2.63 billion and a net loss of $295.0 million to $320.0 million for the year. (Source: “SunPower shares fall after company misses revenue mark, announces restructuring,” MarketWatch, November 9, 2016.)
SPWR stock took another hit when the company said during a conference call that it was enacting “significant” cost-reduction initiatives in order to prepare for a more volatile solar market. A restructuring program report will be released on December 7, according to SunPower.
This is further bad news for SPWR stock after an announcement to cut their workforce by 15% came in August. SunPower faces a similar challenge that other solar panel producers have come against, with consumers delaying panel purchases due to a belief that panels will fall in price. (Source: “Solar Panel Maker SunPower Plans Cost Cutting,” Fortune, November 9, 2016.)
Add this to fears that a Donald Trump presidency could have a negative impact on government subsidies and other incentives for solar panels, and the solar power market may be in rough tides ahead. Of course, this is all just speculation at the moment, but investors are naturally wary of solar panels losing some of their luster to the consumer as the administration in the U.S. shifts from being more green-friendly to skeptical.
This year in general has been a tough go for SPWR stock. The value of shares has fallen by 79% since the beginning of 2016, representing a rather steep drop from its steady rise in previous years. SPWR stock hit a high point in 2014, surging up to $41.00 per share, and has steadily declined since.