SunPower shares gain on investigation update

By TALI ARBEL

posted: 56 DAYS 22 HOURS AGO

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NEW YORK -Shares of SunPower Corp. rose Tuesday after the company told investors its continuing internal investigation into accounting irregularities has showed no new problems.

The San Jose, Calif., solar cells and panels maker said its probe into unsubstantiated accounting entries related to its manufacturing operations in the Philippines is "consistent with the preliminary findings."

SunPower said it was still working with outside experts and SunPower employees to complete the investigation. It had said in November that until its probe was complete, it could not tell investors that broader issues didn't exist.

SunPower shares gained $1.26, or 5.4 percent, to $24.44 in midday trading.

On Nov. 16, SunPower said it may have understated the cost of goods sold by $1 million in the first quarter, but overstated expenses by $14 million in the second quarter and $2 million in the third quarter. SunPower also estimated about $9 million in understated expenses during 2009 should actually have been recorded in 2008.

It said at the time it was working with its audit committee to determine if any restatements to its 2009 or 2008 results would be necessary.

The update "doesn't say much," said analyst Michael Horwitz of R.W. Baird & Co. Still, "it's better than the worst-case scenario, (of) them furthering the restatement more dramatically."

He said the update, coupled with the fact that SunPower's business fundamentals are doing well and the stock is relatively cheap, are giving a lift to shares.

2009-12-15 13:06:30