Solar maker Maxeon pulls guidance on ‘significant’ barriers

Maxeon Solar Technologies Ltd. plunged after the solar-panel producer warned that “significant” market headwinds including a weak rooftop market, project delays and detained imports into the US will drag down sales. 

The company said US Customs and Border Protection has been blocking imports from its Mexico factories since July, according to a statement Tuesday. Maxeon isn’t providing sales guidance and is planning a 1-for-100 reverse share split. 

Maxeon’s struggles come amid slowing demand for US rooftop solar installations. High interest rates have raised prices in that segment of the industry, a key market for Maxeon, which offers panels that typically have higher performance but are also more expensive. The company sells them at about 30 to 40 cents a watt, according to Rob Barnett, a senior analyst at Bloomberg Intelligence, while the global average has fallen to about 10 cents. 

“That puts the company in a very precarious position,” Barnett said in an interview. “It’s very hard to compete.”

Maxeon, based in Singapore, said sales in the third quarter will “decline significantly” from the $184 million it posted in the second quarter, according to the statement. It won’t provide sales guidance for the current period and is withdrawing its full-year forecast. 

US Customs officials have told the company that its detention of Maxeon’s panels is “routine,” according to the statement, as the agency assesses its compliance with a law designed to prevent the import of products made with forced labor in China. However, it’s unclear when the shipments will be released, and the hold is a significant sales barrier because the US accounted for more than 60% of sales last quarter. 

Maxeon shares plunged as much as 21% to about 8 cents, approaching the lowest since it spun out of SunPower Corp. in 2020. Its former parent company went bankrupt last month after deciding to focus on the challenging rooftop solar market. 

All this points to a difficult path for Maxeon, according to Barnett. The company reported an adjusted second-quarter loss before interest, taxes, depreciation and amortization of $36.6 million, compared with earnings of $30.2 million a year earlier. 

“Do they have a path to profitability? Not anytime soon,” Barnett said.