Suntech Power today announced financial results for its third fiscal quarter ended September 30, 2011.
- Total net revenues were $809.8 million in the third quarter of 2011, representing a sequential decrease of 2.5%, and an increase of 8.9% year-over-year.
- Total PV shipments increased approximately 16% sequentially, and 36% year-over-year.
- Gross profit margin was 13.3% in the third quarter of 2011, at the high end of the previously guided range of 11% to 13%.
- Net loss attributable to holders of ordinary shares was $116.4 million, or $0.64 per diluted American Depository Share (ADS). Each ADS represents one ordinary share.
- Suntech achieved 1.6GW of silicon ingot and wafer capacity and 2.4GW of cell and module capacity as of the end of the third quarter of 2011. PV cell capacity includes 600MW of capacity that is operated by a Suntech joint venture.
“Suntech’s diverse global sales channels combined with customer preference for high performance, bankable products enabled Suntech to meet our third quarter shipment and margin guidance, despite the challenging market conditions,” said Dr. Shi, Suntech’s chairman and CEO.
“While European markets remained the cornerstone of demand in the third quarter, we were pleased to see continuing growth opportunities in the Americas and the Asia Pacific. In particular, demand for solar in China accelerated rapidly with the introduction of the first national feed-in-tariff.”
“Looking forward, we expect excess capacity to fuel strong competition and consolidation in the next two to three quarters. This will be challenging for all solar companies. Through this period, we will accelerate initiatives to strengthen our financial and operational discipline and streamline our organization. These include reducing operating expenses by 20% in 2012, holding capacity expansion in 2012, and improving working capital by $200 million by the end of 2011.”
“At the same time, we also recognize that the near-term challenges create opportunities, and we are excited by the prospects for the solar industry. Lower cost will drive significant growth in demand, especially for utility-scale solar projects. With Suntech’s brand, bankability and well-established channels to market, we are confident that we will be well positioned to supply this next wave of solar growth,” said Dr. Shi.
Third Quarter 2011 Results
Total net revenues for the third quarter of 2011 were $809.8 million, compared to $830.7 million in the second quarter of 2011 and $743.7 million in the third quarter of 2010. The sequential decrease of revenues was primarily due to a decline in the average selling price of PV products, which was partially offset by an increase of shipments.
In the fourth quarter of 2011, Suntech expects PV shipments to decrease by approximately 20% compared with the third quarter of 2011. Suntech expects gross margin will be in the range of 9% to 11% in the fourth quarter of 2011.
For the fiscal year ending December 31, 2011, Suntech expects to ship at least 2GW of solar products and generate revenues of $3.0 billion to $3.1 billion, subject to changes in foreign exchange rates. This compares to previous shipment guidance of 2.2GW and revenue guidance $3.2 to $3.4 billion. Excluding the $91.9 million impact of the MEMC warrants in the second quarter of 2011, non-GAAP gross margin for the full year 2011 is expected to be range of 11% to 13%(2).
Full year 2011 capital expenditures are expected to be approximately $400 million, compared to previous guidance of $340 million to $360 million. Suntech will maintain its wafer capacity at 1.6GW and cell and module production capacity at 2.4GW.
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