SunPower Plunges: Forecast Cut on Weak Demand
- SunPower Corp reports a wider-than-expected Q3 loss, sending shares tumbling 12%. CEO Peter Faricy cites "stormy seas" and higher interest rates as the cause. Learn how this affects the company's outlook for the year and customer projections.
SunPower Corp. reported a wider-than-expected third quarter loss and cut its full-year guidance due to weaker demand for its rooftop-solar systems. Shares of the Richmond-based company dropped 12% to $3.75 after the news. The company expects to add 70,000 to 80,000 new customers this year, down from July when it forecast as many as 90,000 customers, and a net loss for the year of $165 million to $175 million, down from July's forecast of a loss of $70 to $90 million. CEO Peter Faricy attributed the weak performance to "stormy seas" and the continued effects of higher interest rates.
What Caused SunPower Corp's Wider-Than-Expected Loss?
Following are the potential factors that could have caused SunPower Corp.'s wider-than-expected loss:
- Weaker demand for rooftop-solar systems: SunPower Corp.’s third quarter results showed weakened demand for its solar systems, leading to underperformance.
- Interest rate fluctuations: With the rise in interest rates, the ability of customers to invest in solar systems and rooftop projects were hindered which led to a weaker performance.
- Stormy Seas: CEO Peter Faricy blamed the underperformance to “stormy seas” which could have been caused due to the uncertainties in global economy.
- Penalties and Tariffs: SunPower Corp. is also facing stiff competition from foreign companies due to the fact that foreign companies are not subjected to the same penalties and tariffs imposed by US government.
- High costs of solar energy: High cost of solar energy relative to other energy sources could have also impacted the demand for SunPower Corp.’s solar systems.