SunPower tumbles nearly 20% after pausing some operations
18/07/2024 18:48
By Sourasis Bose
July 18 (Reuters) - SunPower SPWR.O shares plummeted
nearly 20% on Thursday after the solar company informed clients
that it is pausing some operations, including deactivating lease
and power purchase agreements from its own sales platform and
halting new product shipments.
In an online communication seen by Reuters and confirmed
as authentic by the company, SunPower said it would stop
countersigning new agreements and would be unable to support
installation services for shipments in transit or already
delivered.
Its shares were trading 18.6% lower at $2.06.
"We continue to dedicate our attention to address our
financial position and are actively working to navigate our
current challenges," the company said in a statement to Reuters.
Companies providing solar power and storage solutions
have been struggling with rising inventory levels amid weakness
in the rooftop solar market.
Metering reforms in California - the biggest solar
market in the U.S. - have further dragged down demand, lowering
the tariff residential customers receive from the grid.
SunPower has had a challenging few quarters, having
received a subpoena from the U.S. Securities and Exchange
Commission in February regarding its accounting practices.
The company's
CEO also left the company
in the same month, while its auditor, Ernst & Young, quit
in June.
In April, it announced
plans
to reduce its workforce and eliminate most of its direct
sales channels as part of a restructuring plan to rein in costs.
Energy major TotalEnergies TTEF.PA , one of SunPower's
largest shareholders, declined to comment on the issue.
Gordon Johnson from GLJ Research cut the company's price
target to $0 and raised doubts over investor commitments to the
company.
SunPower's woes could likely give a boost to competitors
Sunnova NOVA.N and Sunrun RUN.O , according to Roth analysts.
(Reporting by Sourasis Bose in Bengaluru; Editing by Tasim
Zahid)
((Sourasis.Bose@thomsonreuters.com;))