NEW YORK (TheStreet) -- SunPower (SPWR) - Get SunPower Corporation Report  shares haven't done well in the past month, falling by 13%. Shares fell by 2.3% Thursday alone, closing at $29.60. Recently released third-quarter earnings, in which SunPower beat estimates, still haven't helped.  

SunPower isn't the only solar stock suffering. During the past month, First Solar (FSLR) - Get First Solar, Inc. Report fell by 15%; SunEdison (SUNE) was near flat at a 0.4% gain. Meanwhile, the S&P 500 (SPY) - Get SPDR S&P 500 ETF Trust Report was up 1.1% for the past month, and the small-cap Russell 2000undefined was up 4.9%. That may indicate that the fall in SunPower's shares is more about industry weaknesses and lower profit margins, a situation exacerbated by the decline in oil prices.

Solar power offers an alternative to oil. As such, when oil prices come down, the expected growth in demand for solar power could presumably fall.

Adjusted earnings per share reached 30 cents, 5 cents higher than analysts' consensus, but still 14 cents lower than in the third quarter of last year. Revenue was $662 million, 0.8% higher than in the same quarter in 2013 and 6% higher than market expectations. 

So what didn't impress SunPower's investors in the quarterly report?

One of the main problems the company has been facing is smaller profit margins. In the past quarter, its gross margin fell to 16.4% -- its lowest level in recent quarters. The company still estimates its gross margin to range between 19% and 20% during the year. But as the competition in the North American solar market continues to intensify, solar panel manufactures' profit margins are likely to contract.

The chart below shows the changes in SunPower's gross profitability in the past few quarters.

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Source of data: Google Finance

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The company also modified its annual outlook, as presented in the table below.

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Source of data: SunPower's Web site

As you can see, the company revised up its guidance for revenue and net earnings per share, but the gross margin fell from an average of 20% to 19.5%.

Also, the company's reliance on the Asian market could be a double-edged sword.

So far Japan, which accounted for 28% of its total shipments in the past quarter, is driving up SunPower revenue. But the current expectations for slower growth in Japan -- the IMF recently revised down its projections for the country's GDP growth rate to 0.8% from 1% in 2015 -- could eventually trickle down to the solar industry and curb growth. 

In addition to industry weakness, potential lower growth in Japan and strong competition in North America are among the challenges SunPower will have to face in the near term.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary from an outside contributor, separate from TheStreet's news coverage.