Suntech Power Holdings Co. (STP, K3ND.SG) swung to a fourth-quarter loss as the solar-panel maker reported higher operating expenses, softer revenue and higher foreign exchange losses.
Suntech Power Holdings Co. (STP, K3ND.SG) swung to a fourth-quarter loss
as the solar-panel maker reported higher operating expenses, softer revenue and
higher foreign exchange losses.
Suntech, which has now reported three straight quarters of losses, has taken
steps to keep up with a rapidly changing market, such as its recent unveiling
of plans for a broader reorganization that included a shuffling of executives. SunPower
has said it remains focused on expanding in the
U.S.
and
Europe
, as
well as
South Africa
and
the
Middle East
.
Chief Executive Zhengrong Shi said Thursday the company expects excess capacity
and further policy changes in the
U.S.
and
Europe
to
keep up intense competition in the solar industry.
"In this context," he continued, "our top priorities are to
continue to drive down our production cost, invest in channel development and
bring to market the most competitive product offerings."
Pointing to the current period, Suntech said it expects shipments to decline by
30% from the fourth quarter, due to softer seasonal demand. For the full year,
it expects shipments of 2.1 gigawatts to 2.5 gigawatts, compared with 2011
shipments of 2.1 gigawatts.
Suntech reported a loss of $136.9 million, or 76 cents an American depositary
share, compared with a year-earlier profit of $358 million, or $1.83 an ADS. The
year-earlier period was aided by equity in earnings of affiliates, which
totaled $323.8 million a year ago, compared with a loss of $58.1 million in the
latest period. Excluding certain writedowns and other items, the latest
quarterly loss was 30 cents an ADS. Analysts polled by Thomson Reuters expected
a loss of 32 cents a share.
Revenue declined 33% to $629 million due to fewer shipments and weaker selling
prices. The company last month said it expected revenue of $610 million to $630
million, topping analyst estimates at the time.
Operating expense rose 54%.
Shipments increased 3.2% from a year earlier while declining 9.7% from the
third quarter. The company had anticipated shipments to drop 10% from the third
quarter.
Gross margin narrowed to 9.9% from 17.4% a year earlier, meeting the company's
forecast of 9% to 11%.
Suntech's ADS closed Wednesday at $2.93 and were inactive premarket. Through
the latest close, the stock has risen 33% since the start of the year, aided by
its upbeat fourth-quarter revenue view and increased full-year guidance last
month.
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