SunPower Corp. (NASDAQ:SPWR) witnessed its sharpest decline in four months after revealing intentions to restate nearly two years of financial results.
The rooftop solar company anticipates that the revisions, stemming from misclassified sales commissions and other expenses, will reduce income from continuing operations for 2022 and 2023 by $15 million to $25 million, per a Tuesday filing.
Shares plummeted by as much as 17%, marking the steepest intraday loss since December, before recovering most of the decline.
This restatement comes amidst challenging times for the company. SunPower changed its top leadership this year and defaulted on a credit agreement in late 2023 following a prior earnings adjustment that led to result delays. To alleviate a cash crunch, SunPower had to raise $200 million and announced in January its intentions to restructure operations to curtail costs.
Analysts at Truist Securities Inc., led by Jordan Levy, expressed their anticipation that this situation would lead to increased investor concern regarding potential covenant violations and overall management credibility, considering the ongoing challenges faced by SPWR.
The rooftop solar industry is grappling with challenges as elevated interest rates increase the cost of installing panels. In California, the largest solar market, reductions in payments to households and businesses selling excess solar power back to the grid have left the industry in turmoil. Approximately two-thirds of household solar installers in California, where SunPower is headquartered, are struggling to maintain sufficient sales.
SunPower intends to restate its 2022 annual report and quarterly results through the first nine months of 2023. The misstatements primarily pertain to the capitalization of deferred costs, classification of sales commissions, and general and administrative expenses.
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Author Faith Yakubu 
