SunPower Corp (SPWR) to Post Q3 Earnings: What's in Store?

Zacks Equity Research
·3-min read

SunPower Corporation SPWR is set to report third-quarter 2020 results on Oct 28, after market close.

In the last reported quarter, the company witnessed an earnings surprise of 47.62%. In the trailing four quarters, SunPower came up with an earnings surprise of 244.23%, on average.

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

Factors Under Consideration

During the third quarter of 2020, SunPower and Maxeon Solar Technologies completed the spin-off transaction, repositioning the former as a complete U.S. downstream pure-play solar company. Notably, the separation of these companies is likely to have affected

SunPower's revenues in the soon-to-be-reported quarter due to the exclusion of the business that is now part of Maxeon Solar Technologies.

Moreover, during the second-quarter earnings call, SunPower announced its expectations to witness flat business volumes during the third quarter, much due to the ongoing pandemic. This might have weighed on its soon-to-be-reported quarter’s revenues.

Notably, the Zacks Consensus Estimate for third-quarter sales is pegged at $233 million, which indicates a 52.6% plunge from the year-ago quarter’s reported figure.

Over the past couple of quarters, SunPower faced certain challenges in terms of project execution, which led to untimely delays, thereby pushing up fixed costs. Considering the ongoing prolonged pandemic impacts, a similar trend is likely to have continued in the third quarter as well. These expenses along with costs related to the aforementioned spin-off transaction are likely to have negatively impacted its third-quarter earnings.

The Zacks Consensus Estimate for the company’s third-quarter loss is pegged at 5 cents per share, implying a stark deterioration from the year-ago quarter’s reported earnings of 7 cents.

Earnings Whispers

Our proven model does not predict an earnings beat for SunPower this time around. 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. But this is not the case here.

Earnings ESP: The company’s Earnings ESP is 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

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

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

A Stock to Consider

Here is a solar company you may want to consider as it has the right combination of elements to post an earnings beat in its upcoming release:

First Solar FSLR has an Earnings ESP of +1.84% and a Zacks Rank #3. The company will announce third-quarter 2020 earnings on Oct 27.

Upcoming Solar Releases

Enphase Energy ENPH carries a Zacks Rank #3 and is set to release third-quarter 2020 results on Oct 27.

Sunnova Energy International NOVA carries a Zacks Rank #3 and is set to release third-quarter 2020 results on Oct 29.

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