Suntech Power Holdings Co.'s (STP, K3ND.SG) first-quarter earnings rose
54% as shipments and revenue surged though currency hedging losses and concerns
over sales in
Europe
weighed on the bottom line.
Pricing pressure also prompted the company to cut its full-year revenue
guidance by $100 million, with a new forecast of $3.3 billion to $3.5 billion.
Suntech's ADS were off 2.2% to $7.49 premarket Wednesday. They were down 23%
over the past three months through Tuesday's close.
China-based Suntech has grown to become the world's largest solar-panel maker
as government renewable-energy incentives drive increasing worldwide demand. It
posted mostly higher profits over the past year, but uncertainty surrounding
some subsidies, particularly in
Italy
, have
threatened its top line.
Chairman and Chief Executive of Zhengrong Shi said the uncertainty in
Italy
, a
long winter in
Germany
and
first-quarter seasonality contributed to a sequential decline in sales, though
Shi added the company saw greater demand in other emerging markets, including
China
.
Suntech has diversified its production base and selling markets lately by
adding shifts at its
Arizona
manufacturing plant and launching projects across the
Americas
and
Asia-Pacific region.
Suntech reported a first-quarter profit of $31.9 million, or 17 cents an
American depositary share, up from $20.7 million, or 11 cents an ADS, a year
earlier. Losses from hedging activities contributed to $56.9 million in other
expenses in the latest quarter, compared with a $2.8 million gain a year
earlier. Revenue jumped 49% to $877 million.
Analysts polled by Thomson Reuters most recently forecast a 35-cent per-share
profit and $864 million in revenue.
Shipments grew 63% from a year earlier but fell 3.1% from the fourth quarter. The
company's March forecast had called for relatively flat sequential growth.
Gross
margin narrowed to 19% from 19.5%.