So much for a solar rally on the Obama victory. Late last night, while nobody was paying attention to things like corporate press releases, SunPower announced that the sharp rally in the dollar would hurt its Europe-dependent earnings. In early trading, the stock is off about 20%. Because of the generous subsidies afforded by European nations, the company said, it had recently converted a number of its subsidiaries from being denominated in dollars to euros — bad timing.
For the fourth quarter, the currency impact will be $15 million.
In a note, AmTech Research describes the news as a hiccup that does not take away from the overall story for the company:
We do not believe this announcement changes SunPower’s strategic position in the market or its ability to execute on the solar opportunity. However, this is an unfortunate blunder for a management team with a very strong history of out-performance. After discussion with management we believe the hedging program has been reset to very conservative assumptions.
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