This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Cypress Plans SunPower IPO

Updated from 12:39 p.m. EDT

In a surprise announcement, Cypress Semiconductor (CY - Get Report) said it will pursue an initial public offering for its SunPower unit. Also, Manny Hernandez, the longtime chief financial officer at Cypress, will become SunPower's CFO and Cypress will begin a search for a new top financial executive.

Shares spiked on the news, advancing 13% to $13.03. Cypress made the announcements during its first-quarter financial conference call on Thursday during the trading session.

"We've decided that we are going to begin investigating an IPO for SunPower," says Cypress CEO T.J. Rodgers. He said SunPower needs funds to build out its manufacturing capabilities and that Cypress can accommodate the expansion, but that an IPO for SunPower would be the best way for its unit to grow.

IPO plans for the unit overshadowed a disappointing first quarter. Cypress reported a loss of $65.1 million, or 50 cents a share, on sales of $200.3 million. Excluding charges, the chipmaker posted a loss of 19 cents a share. Analysts had expected a loss excluding charges of 13 cents a share and sales of $210 million, on average, according to Thomson First Call.

However, Rodgers said the results represent the bottom of the current slowdown. The company predicted second-quarter sales between $210 million and $235 million with a loss between 8 cents a share and earnings of 2 cents a share. "Our aspiration is to break even this quarter," says Rodgers.

Analysts had expected a loss of 1 cent a share and sales of $224 million.

Cypress reported separate results for its SunPower unit for the first time in its just-completed first quarter. The subsidiary reported a loss of $5 million on sales of $11 million. Sales at the unit were expected to be $10 million.

"We need money to fund SunPower's growth," says Rodgers. "We don't want SunPower to be limited by money." He said Cypress could fund the expansion, but that the growth potential of the silicon solar industry will likely yield a better valuation -- and thus more money -- for SunPower through an IPO.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
CY $12.78 0.00%
AAPL $130.28 0.00%
FB $81.53 0.00%
GOOG $565.06 0.00%
TSLA $218.42 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs