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Solar Stock #4:
SunPower Corp. (SPWRA)

On Friday, July 24, Northern California-based SunPower Corp. (SPWRA) stunned the Street with a red-hot earnings beat. For Q2, SunPower reported earnings of 24 cents per share, beating consensus by 10 cents. Revenues rose 39% year-over-year to $298 million versus the $263 million consensus. The company also issued upside guidance for fiscal year 2009, seeing EPS of $1.15 to $1.60, compared to the consensus of 96 cents.

In a really bullish sign for SunPower going forward, the company also reiterated its 2009 capex guidance of $250 million to $300 million.

I think several favorable trends support SunPower's strong outlook going forward, including:

• A 76% jump in module sales (as opposed to full solar systems) that enabled SunPower to lower inventory by $80 million and cut its inventory days nearly in half, thereby reducing inventory risk.
• Funding for cheaper roof-top installations of solar panels — SunPower's sweet spot — should be available and could actually improve in calendar year 2010.
• SunPower's brand and technology has higher exposure to the U.S. solar market than its competitors, a big advantage now that the U.S. market is on the upswing, supported by government subsidies and a favorable regulatory environment.

I really like SunPower shares, and I would definitely be a buyer here.

NEXT: Solar Stock #5 – Suntech Power