SunPower on Thursday reported a drop on fourth-quarter earnings, but a sharp increase in annual revenues driven by large solar projects.
Net income for the fourth quarter, which ended December 30, 2007, was $4.8 million, or 6 cents per share. That is a 56 percent decline compared to the same period in 2006.
Revenues for the quarter were $224.3 million, over 200 percent higher than the same period a year earlier.
The company said the jump in revenue was due to strong demand for solar electric equipment and the installation of a few large projects, including the Nellis Air Force Base in Las Vegas, Nev. SunPower blamed the profit decline on special charges.
For all of 2007, revenue was $775 million, more than triple the amount in 2006, company executives said.
The company forecast that revenue in 2008 will be $1.2 billion to $1.3 billion and that sales in 2009 will grow between 40 and 50 percent higher, faster than the overall industry.
Despite the positive outlook, SunPower apparently disappointed investors. Its stock dropped 7 percent after it announced results.
Solar sector stocks across the board have been hurt in the past several weeks as investors fear that companies' stocks are over-valued. SunPower's stock is down more than 40 percent since the beginning of the year.
During a conference call with analysts, SunPower CEO Tom Werner said the company is on track to reduce the cost of solar power 20 percent by 2012. It will do that by increasing the output of panels and solar cells and reducing the cost of installation.
He said the company forecasts that supply of silicon--a key constraint for solar cell manufacturers--will be "abundant" this year.
With more silicon available, there will be downward pressure on product price. To avoid losing revenue as this happens, SunPower is developing its "downstream channel" to sell more to installers, Werner explained.
Chief Financial Officer Emmanuel Hernandez said that despite signs of a recession in the U.S. economy, SunPower and the solar sector overall will not be significantly affected because of rising electricity prices and strong demand for alternative energy sources.