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SunPower Corp (SPWR) to Post Q4 Earnings: What's in Store?

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Zacks Equity Research
·3 min read
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SunPower Corporation SPWR is set to report fourth-quarter 2020 results on Feb 17, after market close.

In the last reported quarter, the company witnessed an earnings surprise of 20%. In the trailing four quarters, SunPower came up with an earnings surprise of 49.23%, on average.

Let's take a closer look at the factors influencing the company’s upcoming quarterly results.

Factors to Consider

With gradual recovery of the global economy from the impacts of the coronavirus outbreak, rebound in demand for solar products has been witnessed since the beginning of the third-quarter 2020. Consequently, SunPower observed strong booking performance during the third quarter, which in turn must have had a favorable impact on the company’s fourth quarter revenues.

SunPower Corporation Price and EPS Surprise

SunPower Corporation Price and EPS Surprise
SunPower Corporation Price and EPS Surprise

SunPower Corporation price-eps-surprise | SunPower Corporation Quote

Moreover, strong megawatt growth in the company’s residential retrofit and new homes businesses must have also boosted its revenues in the soon-to-be-reported quarter. Further, with SunPower having started installation of its SunVault storage solution in volume, since the third quarter, the company is projected to have witnessed increase in its revenue per customer during the fourth quarter.

Nevertheless, following the spin-off of its Maxeon Solar Technologies during the third quarter of 2020, revenues generated from Maxeon Solar are no longer part of SunPower’s total revenues. This might have had an adverse impact on the company’s overall top line performance during the fourth quarter.

The company is expected to have witnessed a significant increase in gross margin per watt during the fourth quarter in its residential business, driven by benefits from improvements in residential loan and lease economics and execution of its cost roadmaps. Also, a solid booking performance in the third quarter enabled the company to increase its fourth-quarter EBITDA guidance. These factors make us confident about a solid bottom-line performance by SunPower in the soon-to-be-reported quarter.

On a brighter note, the company has been witnessing increased customer demand for its SunVault residential storage solution that it launched at the onset of the fourth quarter. This in turn is expected to have translated into notable customer growth for the company that will get reflected in the upcoming results.

Earnings Whispers

Our proven model predicts an earnings beat for SunPower this time around. Notably, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: The company’s Earnings ESP is +0.68%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: SunPower currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Upcoming Solar Releases

SolarEdge Technologies SEDG is scheduled to post fourth-quarter 2020 results on Feb 16.

Sunrun RUN is set to release fourth-quarter 2020 results on Feb 25.

A Recent Solar Release

Enphase Energy ENPH reported fourth-quarter 2020 adjusted earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents by 27.5%.

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