SunPower Corp. (SPWR - Analyst Report) reported second-quarter 2015 adjusted earnings per share of 9 cents, lagging the Zacks Consensus Estimate of 14 cents by 35.7%. Reported earnings also plunged 55% from the year-ago quarter.

Lower revenues, along with higher operating expenses, negatively impacted the company’s second-quarter results.

GAAP earnings came in at 4 cents per share, compared with 9 cents earned in the year-ago quarter.

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Operational Results

During the quarter, SunPower generated non-GAAP revenues of $376.7 million, missing the Zacks Consensus Estimate of $572 million by 34.1%. Reported revenues also dropped 39.3% from the year-ago figure of $621.1 million.

SunPower’s gross margin of 16.7% fell 220 basis points (bps) from 18.9% in the prior-year quarter. Total operating expenses escalated 18.8% year over year to $103.8 million. Operating expenses increased on account of research and development expenses (up 24% year over year) and selling, general and administrative expenses (up 14%) as well as restructuring charges of $1.7 million.

In the quarter, the company formed 8 point 3 Energy Partners LP (CAFD - Snapshot Report), a joint YieldCo vehicle with First Solar, Inc. (FSLR - Analyst Report).

Financial Position

SunPower had cash and cash equivalents of $623.0 million as of Jun 28, 2015, compared with $956.2 million as of Dec 28, 2014. Long-term debt increased to $225.3 million from $214.2 million at 2014-end.

In the first half of 2015, the company had net cash outflow of $325.4 million from operating activities, up significantly from $81.6 million in the prior-year period.

Free cash flow was $4.8 million as against a free cash outflow of $21.0 million in the first half of 2014.

Guidance

On a non-GAAP basis, the company expects revenues in the range of $400–$450 million for the third quarter and $2,400–$2,600 million for full-year 2015. Gross margin is estimated between 10% and 12% for the third quarter, and 21% and 23% for the full-year 2015. SunPower expects adjusted earnings per share in the range of $1.50 to $1.80 for 2015.

Another Upcoming Release

Canadian Solar Inc. (CSIQ - Analyst Report) is scheduled to release its second-quarter 2015 results on Aug 18. The Zacks Consensus Estimate is 13 cents.

Zacks Rank

Currently, SunPower has a Zacks Rank #5 (Strong Sell).