SunPower To Cut 2,500 Jobs In Restructuring Program; Sees Q4 Charge

(RTTNews) - SunPower Corp. (SPWR) announced a broad restructuring program to position the company for long term, sustainable growth. This includes a workforce reduction of about 25 percent or 2,500 employees.

As part of the restructuring, SunPower will rationalize capacity to balance production with near-term profitable demand through the closure of its 700-megawatt or MW nameplate capacity Fab 2 facility.

The company will also reduce 2017 annual operating expenses to less than $350 million and substantially decrease 2016 inventory to improve working capital as well as de-lever its balance sheet.

Further, SunPower will reduce annual 2017 capital expenditure by more than 50 percent to about $100 million.

As a result of these initiatives, the company expects to incur total restructuring charges of $225 million to $275 million through the end of 2017, of which approximately 30 percent will be in cash.

SunPower said it will incur restructuring charges of at least $150 million on a GAAP basis in the fourth quarter of 2016. It will also record a fourth quarter GAAP and non-GAAP charge in a range of $50 million to $55 million due to the anticipated sale of above market polysilicon.

The company's previously disclosed 2016 fiscal year guidance did not reflect the impact of these two fourth-quarter charges.

For fiscal 2017, SunPower forecast revenue of $1.8 billion to $2.3 billion on a reported basis, and $2.1 billion to $2.6 billion on an adjusted basis, asd well as GAAP restructuring charges totaling $75 million to $125 million.

On average, analysts polled by Thomson Reuters expect the company to report revenues of $2.70 billion. Analysts' estimates typically exclude special items.