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SunPower Q2 revenue in line with forecasts

SunPower’s preliminary second quarter results reflect changing market conditions and policies in Germany and Italy.

By Isabella Kaminski

US-based solar module manufacturer SunPower expects Q2 2011 revenue to be approximately between US$590 million (£360m) to $595m, in line with its previous outlook of $550m to $600m.

SunPower expects gross margin for the second quarter ending 3 July 2011 to be between 3% and 4% and a loss per share of approximately $1.50 to $1.55.

Preliminary Q2 financial results include one-time pre-tax charges totaling approximately $75m, including $29.3m related to the company's panel reallocation, $13.1m in expenses related to the Total tender offer and $32.5m related to the write-down of third-party inventory and costs associated with the termination of third-party cell supply contracts.

According to SunPower, the results reflect a shift in product mix related to market conditions in Germany and recent policy changes in Italy.

Tom Werner, SunPower President and CEO, says: "While we met our revenue goals for the second quarter, our gross margin and bottom line performance was impacted by market conditions in Germany and Italy. Despite these challenges, we successfully reduced inventory quarter over quarter and have begun the process of cancelling above-market third-party cell contracts.

“In addition, we continue to execute on our accelerated cost reduction roadmap and are ahead of our original plan. With the closure of the Total transaction, we commenced negotiations with banks to effectively utilise our $1 billion credit support agreement and expect to enter into new and more flexible credit facilities shortly. With continued strong demand for our high-efficiency systems and our partnership with Total, we are poised to gain share profitably."

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