Solar technology company SunPower Corp. (SPWRA,SPWRB) Monday said that an internal review of its Philippine manufacturing operations identified unsubstantiated accounting entries made in the first three quarters of 2009. Some of these entries relate to the company's fiscal year ended on December 28, 2008.
The company stated that its management informed the Audit Committee of the Board of Directors of these entries and an investigation of the matter is ongoing. The company's Audit Committee and management have also discussed these issues with the company's independent auditors.
Based on preliminary findings, the Audit Committee has identified accounting entries in the Philippines that may have overstated expenses by about $1 million on the cost of goods sold in the first quarter ended on March 29, 2009. The entries also may have understated expenses by approximately $14 million in the second quarter ended on June 28, 2009 and by approximately $2 million in the third quarter ended on September 27, 2009 on the cost of goods sold.
According to SunPower, if the preliminary investigation findings prove to be final, they could impact the company's previously reported interim 2009 financial results. The company is also in the process of evaluating the financial impact of these adjustments on its previously reported results for the fiscal year and interim periods ended on December 28, 2008. The company currently estimates that approximately $9 million of the identified accounting entries should have been recorded in 2008.
Previously, the company had reported first-quarter revenues and operating loss under GAAP of $213.8 million and $2.5 million, respectively, second-quarter revenue and operating income of $297.6 million and $9.9 million, respectively, and third-quarter revenue and operating income of $466.3 million and $34.6 million, respectively. The company had also reported full-year 2008 GAAP operating income of $167.5 million and revenues of $1.43 billion.
The company said it is working with the Audit Committee, the Committee's outside experts, and with the company's independent auditors to determine if any restatements of the 2009 interim financial reports and the 2008 annual report will be necessary. There can be no assurance that broader issues do not exist until the completion of the investigation.
The company also said that its previously issued interim financial statements for each of the 2009 quarterly periods, the previously reported financial results for fiscal 2008, the Form 10-Qs for the 2009 quarters, the 2008 annual report on Form 10-K, and the guidance for fiscal 2009 should no longer be relied upon. The company expects to provide an update on the investigation within the next 30 days.
Additionally, SunPower said that its sales and operating income outlook for the fourth quarter of 2009 remains consistent with its previous expectations, subject to any costs, charges, and tax-related impacts relating to the ongoing investigation.
SPWRA closed Monday's regular trading at $27.23, up $0.81, on a volume of 1.74 million shares. During After Hours, the company's shares dropped 6.28%, or $1.71, to $25.52.
SPWRB rose $0.69 on Monday and ended regular session at $23.90 on 400,177 shares. However, the shares fell 6.28% to $22.40 in the After Hours trading.
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