MEMC Electronics (WFR) Earnings Plunge 96% But Beats Estimates

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08:23:20 pm on July 23, 2009

MEMC Electronics beat analyst estimates after the bell today reporting an EPS of .03 (estimates called for break even) on revenues of $283 million (estimates called for $231 million), but the stock is off after hours.  This is another situation where analysts came in with very low expectations, so beating doesn’t necessarily mean the company is in great shape. 

MEMC’s profits plunged 96% compared to the year ago quarter, while revenues plunged 47%, so not real impressive.  At least they remain in the black and should remain so.  This is certainly not a company in danger of going out of business anytime soon and may be a great long term play if in fact the worst of this economy is in the rearview mirror.

The MEMC CEO was a bit more somber than the SunPower CEO:

“While we saw a significant increase in sales compared with the first quarter, our overall results continue to reflect the generally weak macroeconomic conditions,” said Ahmad Chatila, MEMC’s President and Chief Executive Officer. “Semiconductor wafer volumes rose from severely depressed first quarter levels, primarily due to stronger demand from Asia and inventory replenishment, but continued to be significantly below historical levels. In solar, limited credit availability in the broader solar market continued to restrain demand while supply excesses remain visible across the solar value chain. On the positive side, MEMC continued to broaden its solar wafer customer base during the quarter, adding several new customers.”

He went on to say that there is still limited visibility in the solar sector going forward which continues to be characterized by limited demand growth and excess inventories.  As a result, they are expecting 3rd quarter revenue in the range of $300 – 350 million which would be a small improvement over this quarter.

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