Solar provider SunPower said that it will restate some its previous financial statements, which sent SPWR stock falling sharply on Wednesday.
The stock drop worsened an already brutal slump for the California-based company.
SunPower said in a filing late Tuesday that it would be correcting financial statements for 2022, and the first two quarters of 2023.
"In connection with the preparation of the financial statements, the company preliminarily determined that the value of consignment inventory of microinverter components at certain third-party locations had been overstated in the affected periods in the range of approximately $16 million to $20 million, resulting in the associated cost of revenue being understated," SunPower said in a notice to the SEC.
On the stock market today, SPWR stock is down 17.5% at 4.11 in recent action. SunPower shares have lost 76% of their value this year and are down more than 90% from a high point in January 2021.
Rough Year For Solar Stocks
SunPower's dive adds to a run of volatility for solar stocks. On Oct. 20, manufacturer SolarEdge fell by nearly 30% after the company said it was slashing its outlook for the third-quarter. The company noted weakening demand in Europe.
Solar stocks took an overall hit on SolarEdge's disclosure. The Invesco Solar ETF (TAN) designed to track the industry fell 6%.
Similarly, the Invesco Solar ETF is down 3.5% in recent action Wednesday.
Along with the fall for SPWR stock, SolarEdge was trading down on Wednesday. Moreover, Sunrun, Maxeon Solar and First Solar were down as well.
Shares for solar companies have already been struggling this year. Inflation and rate hikes have slowed demand for residential solar companies in particular.
The 25 solar stocks tracked by IBD MarketSmith in the Energy-Solar industry group have already lost a cumulative 40% in 2023 as of Tuesday. Further, the group's six-month performance ranks last among the 197 groups tracked by MarketSmith.
SPWR Stock Losses Stand Out
Even against that backdrop, the losses for SunPower stand out. SPWR stock has a dismal IBD Composite Rating of 2 out of a best-possible 99, according to IBD Stock Checkup. That means SPWR stock is underperforming 98% of stocks on the market.
SunPower provides an "all-in-one" residential solar system. In 2020, the firm spun off its solar manufacturing business as Maxeon Solar.
Before any restatements, SunPower's earnings reports this year showed rising costs pushing the company into the red.
Further, SunPower's filing Tuesday said the that it has not completed its review and estimates on the financial impact are preliminary.
