No wonder BP Solar (BP) announced in the middle of the first quarter they were shifting strategy. From their earnings report, it’s pretty clear, this one isn’t working.
BP Solar, a division of the oil giant, got punched in the jaw in the first quarter of 2009, with a slump in solar panel sales from 34 MW in 2008 to 15 MW worth in 2009. That led to an $800 million loss for the unit, which includes BP’s biofuel and wind efforts. In Q108, the unit turned in a $193 million loss.
It’s not a big surprise, but it provides a fresh warning for anyone who thinks solar companies will turn in decent quarters to start the year.
Overall, the oil company recorded a profit of $2.39 billion, down from $6.23 billion the year prior. It will also make deeper cuts in spending for the year than previously announced.
UPDATE: This post is based off a Guardian story that says:
BP said today its solar sales during the quarter would generate 15MW of power, down from 34MW in the same period in 2008. BP said this reflected “ongoing weak demand in the market”.
Losses from the unit, which covers its alternative energy operations – also including wind farms and biofuels – totalled $800m (£547m). That compares with $193m of losses in the same period last year, although the unit now includes more overhead costs than it did before.
In the comments BP says this report is inaccurate:
Your writing on BP’s results is highly inaccurate. BP Solar does not declare separate results, nor does BP Alternative Energy. Both are lumped into a general category called “other businesses and corporate.” That group comprises the Alternative Energy business, Shipping, the group’s aluminium asset, Treasury (which includes interest income on the group’s cash and cash equivalents), and corporate activities
It is highly inaccurate to characterise BP Solar as having sustained an $800 million loss when that number actually reflects a variety of corporate expenses and activities. I’m happy to provide you future updates on BP’s alternative energy businesses if you have interest.
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