What Do Analysts Expect for SunPower’s Margins in 1Q16?
What Do Analysts Expect from SunPower's 1Q16 Earnings?
SunPower’s EBITDA estimates
SunPower (SPWR) reported a total adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of about $31 million in 1Q15 and -$73 million in 4Q15. For 1Q16, analysts expect SunPower to report an adjusted EBITDA of $12 million and an EBITDA margin of 3.6%.
The expected margins are lower compared to 7% in 1Q15. A lower EBITDA implies lower income from the company’s ongoing operations. Analysts expect a substantial improvement in the EBITDA margins in 2H16.
Operating income
SunPower (SPWR) reported an adjusted operating income of $2.3 million in 1Q15 and an operating loss of $114.0 million in 4Q15. For 1Q16, analysts expect SunPower to report an operating loss of about $76.5 million.
Moving ahead, analysts anticipate that the company could report an increase in operating income in fiscal 2016 due to higher revenues. This is in line with the company’s fiscal 2016 guidance.
Adjusted net income
SunPower reported an adjusted net loss of $0.8 million for 1Q15 and an adjusted net loss of $125.0 million for 4Q15. For 1Q16, analysts expect SunPower to report an adjusted net loss of about $25.3 million.
Moving ahead, analysts anticipate an increase in the net adjusted income from 2H16. This is primarily due to the anticipated recognition of revenue from the completion of SunPower’s advanced stage projects in the United States.
In the long term, the bottom lines of upstream solar (TAN) companies’ such as SunPower Corporation, First Solar (FSLR), SunEdison (SUNE), Trina Solar, and Canadian Solar (CSIQ) largely depend on fossil fuel prices and environmental regulations.
In the next part, we’ll take a look at the factors that investors should look for in SunPower’s 1Q16 earning results.
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