SunPower (SPWRA) shares have cratered this morning after the company late yesterday disclosed an internal investigation of accounting practices at its Philippine operations, warning that it may have to restate results from 2008 and the first three quarters of 2009. In particular, the company said cost of goods sold appears to have been understated for the June and September quarters.
The disclosure has triggered a wave of mostly negative commentary from the Street, including a number of downgrades.
- Caris & Co. analyst Ben Pang cut his rating to Below Average from Average, with a new target of $21, down from $35. “We think the issue calls into question the profitability and earnings trends for the company and could also impact SPWRA’s ability to win certain contracts,” he writes in a note....
...Meanwhile, analysts already bearish on the stock remain bearish.
- Bank of America/Merrill Lynch analyst Steven Milunovich repeated his Underperform rating. “The even raises questions regarding the containment of this particular issue and the strength of the company’s internal controls,” he writes.
- Pacific Crest analyst Mark Bachman likewise repeated his Underperform rating. “We remind investors that SunPower had to lower EPS guidance by 50 cents roughly one year ago due to accounting issues related to tax planning and foreign currency hedging,” he writes. “Two significant near-term accounting issues should raise investor concerns, and should also call into question whether SunPower has the proper accounting controls in place.”>>>MORE