Cloudy Days For SunPower
November 6, 2008 by Tisa Silver
Filed under Finance
Many analysts commented that an Obama win would bode well with alternative energy stocks. Well, not on Wednesday!
Shares of SunPower Corp. fell 34 percent, closing at $32.85. SunPower saw about 7.6 million shares traded (over 2.5 times its daily average for the past three months) just one day after announcing that the recent strength of the dollar would cut earnings growth for the fourth quarter of this year and all of next year.
SunPower estimated that the foreign exchange woes would cause a $17 million hit to fourth quarter profits. To put this in perspective, SunPower earned just $4.876 million in the same quarter last year.
Yikes!!!
With a P/E of 40+ its possible that SunPower was overvalued anyway.
The news is definitely bad and through effective hedging probably preventable. But if currency conversion issues are the only ones plaguing SunPower, I think it will make a comeback.
