SunPower shares drop on fourth quarter report

Shares of San Jose, Calif.-based SunPower (Nasdaq: SPWR) took a tumble today as the company reported that its profits for the fourth quarter were hit by rising costs.

The solar power products maker's stock was selling at $63 in early trading, down 15.15 percent. The company had a 52-week high of 164.49.

Other solar companies have also taken a dive on SunPower's news, including Solarfun Power Holdings (Nasdaq: SOLF), which was at $14.79, down 12.02 percent this morning.

SunPower announced that its net income for the fourth quarter dropped by 42.2 percent to $4.9 million, or 6 cents per share, down from $8.4 million in the same period a year earlier.

The company said revenue for the quarter more than tripled to $224.3 million from $74.5 million, but profits were affected by increases in operating, interest and tax expenses.

But the future looks bright for SunPower, according to CEO Tom Werner.

"In the latter part of 2008 and beyond, we expect our industry's silicon feedstock to become more abundant, leading to lower solar panel prices which will redistribute the power and profit pools in the value chain," he said.

But it was exactly that statement that has caused concern among some analysts, who worry that power and profit will be distributed away from SunPower and fellow solar module makers.

The company also said it closed a number of deals in the fourth quarter, including financing from Stamford, Conn.-based GE Energy Financial Services, which plans to fund five of SunPower's solar projects in California (see GE unit funding Calif. SunPower projects).

The company raised its 2008 profit and revenue outlook and said it expects to have enough polysilicon in 2010 to boost production by more than six times over 2007.

That would push SunPower's capacity to more than 650 megawatts annually, up from its previous outlook of more than 600 MW.