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$43.01 0.35 (0.82%)
10/10/2008 4:00 PM

SunPower Corp (SPWRA)

CAPS Rating:
**

The Company designs, develops, manufactures, markets and sells solar electric power products, systems and services based on its proprietary processes and technologies.

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Avatar NtscrbEnergy (79.18) Submitted: 2/22/07 1:33 AM : Outperform Start Price: $47.00 SPWRA Score: 30.91

SunPower Corporation engages in the design, development, manufacture and sale of electric power products that include solar cells, solar panels, inverters as well as imaging and infrared detectors. It markets and sells its products to system integrators and original equipment manufacturers in the United States, Europe, Asia, and other countries.

As per the estimated of ‘The Solar Energy Industries Association’, the global solar market is expected to grow at a rate of 40% annually. One of the key success factors for the industry is the fund allocation by the government towards research-based activities. The proposed budget for the industry in fiscal 2007 is $148 million, which indicates a 78% increase in the budget allocation over the prior year. The fiscal 2006 performance of the company has been remarkable as revenues trebled backed by strong demand that also landed the company coming in the black.

Its ‘Powerlight’ subsidiary that provides large-scale solar power systems for commercial, government and utility customer has also been on an expansion spree. The success of the subsidiary business considerably depends on the power plant construction activities. Encashing the same, their future orders from countries like Portugal and Korea would enliven its business prospects.

Also, Europe accounts for over 60% of the company’s revenues and company has large projects that are lined up especially in Spain, which could boost the top line growth ahead. On a flip side, company is experiencing pressures from the rising prices of polysilicon, its key raw material owing to the industry-wide shortages. However, company is in the process of developing wafer-slicing technology that could tone down some the price increases. Thus, taking a broad outlook and the supporting environment, it is expected that the scrip would shine in the future.

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Avatar NtscrbEnergy (79.18) Submitted: 5/15/07 8:01 AM

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Sunpower Corporation (SPWR) is shining brightly in the rewarding solar industry. Revenues in the first quarter of fiscal 2007 increased massively, thanks to the prospering components business and the acquisition of Powerlight. SPWR has number of initiatives to drive sales in the coming quarters. The company has signed a contract to construct North America’s largest solar Photovoltaic plant. It is a 15 MW installation at Nellis Air Force Base. Components business that forms about 45% of the revenues is also likely to grow considering the rising dealer network.

Lately, companies like Wal-Mart and Tiffany have given business to SPWR by going solar to save their pockets from the mounting electric bills. Also, in order to expand its European operations, the company has partnered with Solarpack Corporation on three major projects in Spain. Management is optimistic about the second-generation technology as it has more than 5% better energy conversion efficiency than the first generation technology. SPWR has plans on the horizon to ramp five more lines that will run on the second-generation technology in 2008. The concern for the company is the rising prices of silicon, which is their key raw material. However, SPWR has analyzed its future requirements and has already procured 110 MW of silicon stock for 2007.

Also, the company has integrated the key functions of marketing and research with Powerlight and, expects a 50% cost reduction within the next five years. This could favorably impact the company’s earnings in the future. Additionally the business environment looks sound for SPWR as the U.S government is focusing on carbon mitigation in 2007, which could propel the demand for solar energy. Thus, SPWR looks a good bet at a current price levels.

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