By Arathy S Nair
(Reuters) - The freefall in solar panel prices would likely stop next year and the industry would improve in the latter half of 2017, the chief executive of SunPower Corp (O:SPWR), the No. 2 U.S. solar panel maker, said on Wednesday.
SunPower said it would lay off an additional 25 percent of its workforce, or 2,500 employees, and close one plant as part of a cost-cutting plan announced last month to counter slumping prices.
Solar companies have been hard hit as stiff competition pushed prices lower and customers held off purchases in the hope of a further decline in prices, especially as Chinese companies boosted production levels.
"We are planning for (price) stability, meaning they won't materially decrease or impair," SunPower CEO Tom Werner told Reuters.
"They might be plus or minus a few percent, maybe 5 percent, on a high side 10 percent, so we expect stabilization, not necessarily price increase."
SunPower, which is expected to post its sixth consecutive loss in the current quarter, said average selling prices had tumbled 25 percent in the previous quarter.
The company's shares rose as much as 6.3 percent to $7.40 and also pulled up the stocks of other solar companies.
SunPower, majority owned by French energy giant Total SA (PA:TOTF), said in November it would lower operating costs in 2017 to about $350 million, compared with $450.9 million in 2015, and more than halved its 2017 capital budget to about $100 million.
SunPower on Wednesday said the plan also includes closing a 700-megawatt (MW) solar cell fabrication facility in the Philippines, which would account for most of the job cuts.
The company forecast 2017 revenue, excluding certain items, of $2.10-$2.60 billion, well below analysts average estimate of $2.70 billion, according to Thomson Reuters I/B/E/S.
SunPower said it expects to incur restructuring and other charges totaling about $200 million in the current quarter and restructuring charges of $225-$275 million through the end of 2017.
The company reiterated that it expects to generate positive cash flow from operations through the end of 2017 and exit the year with about $300 million in cash.
SunPower, which said in August it would slash about 15 percent of its workforce, will be left with about 7,000 employees after the latest round of job cuts, Werner said.
The San Jose, California-based company's stock had fallen more than 76 percent this year up to Tuesday's close.