|SunPower Corp. stockpiled up to six month's worth of duty-free solar panels. |
Source: Associated Press
SunPower Corp. is cutting costs and looking for more international business as the effects of a new round of U.S. tariffs on solar power equipment begin rippling through the domestic market, delaying some projects and making others uneconomic, company Chairman, President and CEO Tom Werner said.
In response to the duties, which President Donald Trump approved Jan. 22, SunPower delayed a $20 million plan to expand U.S. employment and is undertaking "other significant cost-saving initiatives," Werner said Feb. 14 on a conference call to discuss the company's fourth-quarter 2017 financial results. SunPower hopes the Trump administration ultimately will exclude the company's high-efficiency panels from the tariffs, and it has a stockpile of up to six month's worth of duty-free panels to help it "manage" during the interim, Werner said.
If SunPower does not win an exemption, the company is prepared to pay the tariffs in order to continue importing solar panels to feed its distributed generation segment, which it views as key to its long-term success, Werner said.
Accounting for the potential impact of the tariffs, SunPower provided guidance showing it expects to generate between $1.6 billion and $2 billion in revenue in 2018 compared to $1.87 billion in 2017.
"Despite near-term industry challenges and policy volatility, we see tremendous growth potential for solar power around the globe and are focused on structuring our business to profitably capitalize on this opportunity," Werner said on the call with analysts.
The California-based company makes solar cells in the Philippines and Malaysia and assembles panels in France and Mexico, according to its annual report for 2016.
For the fourth quarter of 2017, SunPower reported a net loss attributable to stockholders of $568.7 million, or a loss of $4.07 per share, compared to a loss of $275.1 million, or a loss of $1.99 per share, a year earlier. Revenues fell by approximately 36% year over year to $658.1 million.
The results included an impairment charge of $624.3 million stemming from SunPower's decision to sell its interest in a nearly 400-MW portfolio of residential project leases. A deal, which is expected to close in the first half of 2018, is expected to raise approximately $200 million.
SunPower also expects to raise more than $350 million in proceeds from the sale of 8point3 Energy Partners LP, a joint venture with rival solar company First Solar Inc.
Excluding certain items, SunPower reported non-GAAP income attributable to stockholders of $35.8 million, or 25 cents per share, for the fourth quarter of 2017.