China Sunergy (CSUN) Reports Steep Loss, Revenues Plunge 50%, But Stock Rises

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11:28:47 am on May 27, 2009

The theme that we’ve seen for several months now continues for the most part.. solar company reports steep loss and plunging revenues, but the stock holds up or even rises as is the case with China Sunergy (CSUN) today.  The company reported a steeper than expected loss of .33/share (vs expectations of a .26) on revenues of just $37 million which is a more than 50% plunge from the year ago quarter.  However, traders are likely focusing on the more optimistic future as CSUN works through their higher priced inventory.  The CEO commented:

“However, China Sunergy did demonstrate progress compared to last quarter by reducing our negative gross margins and net loss. As the first quarter progressed, we began to purchase high-quality, lower cost wafers at spot market pricing. The cells we manufactured utilizing these new wafers generated positive gross margins, which began to partly offset the impact of the more expensive wafers in our inventory. As we continue to exhaust our inventory of high-cost wafer and further enjoy the benefits of reduced wafer pricing, we anticipate this recovery will continue and we expect to report positive gross margins in the second quarter. Although we are facing significant headwinds, we have begun to receive positive indications regarding the strength of our results over the coming quarters and 2009.”

Looking ahead, the company expects shipments to be between 35MW and 40MW for the 2nd quarter and 150MW to 200MW for the full year 2009.  It expects gross margins to recover to the low single digits this quarter and further improve to 15 – 20% in the 2nd half of the year.

Shares of CSUN are currently up about 4% and looking like they want to test the 200 day moving average in the coming days.

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