SunPower’s shares took a beating after the solar panel company announced it was expecting a loss of up to $175 million this year and would cut about 15% of its workforce.
For the second quarter, SunPower posted a lower-than-expected loss of $70 million, or 51 cents a share, on $420 million in revenue. But it now forecasts a net loss of $125 million to $175 million this year, a sharp reversal from an earlier outlook of a profit of up to $50 million.
On news of the earnings report, the company’s stock fell more than 30%, to $10.31, in trading Wednesday.
“We see a number of near-term industry challenges, primarily in our power plant segment, that we expect to impact our business and financial performance in the second half of 2016,” SunPower CEO Tom Werner said in a news release.
He cited, among other things, the extension last year of tax credits for renewable energy, saying it “has reduced the urgency to complete new solar projects by the end of 2016, with many customers adopting a longer-term timeline for project completion.”
In addition, Werner added, near-term economic returns have deteriorated “due to aggressive [power purchase agreement] pricing by new market entrants, including a number of large, global independent power companies.”
As part of a realignment of its power plant segment, SunPower said it will lay off about 1,200 employees, with most of the job cuts resulting from the closure of a panel assembly facility in the Philippines.
On an earnings call, analyst Ben Kallo of Robert W. Baird & Co. questioned Werner about the timing of the revised guidance. “I want to understand how quickly you knew this, so that people don’t walk away and say, ‘Tom is a liar,’” he said.
“Well, I can assure you, I’m not a liar,” Werner replied. “And that market developments in our case materialized in May and beyond.”
SunPower’s stock has lost more than 65% of its value so far this year.