MEMC Electronic Materials (WFR) Struggles Again – Misses & Guides Lower

MEMC Electronic Materials (WFR) just can’t seem to get it going.  Just when you think they are ready to turn the corner, they turn in another disappointing quarter and today was no exception.  Despite a few firms coming out with bullish calls on WFR in recent days (Barclays, Gleacher & Kaufman Bros), the company missed on EPS posting results that were .03 lower than what analysts expected with .06.  Revenues misses as well with the company posting $448 million vs the estimate of $466.  Those numbers are a decent sequential improvement and a significant improvement over the year ago quarter, but include SunEdison numbers which accounted for $30 million in revenues in the quarter.

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CEO Ahmad Chatila commented: “Our second quarter results extend a pattern of steady improvement.  We are experiencing stronger market demand, reacting to solar supply chain challenges, reducing our cost structure, and ramping the SunEdison business.  We are simultaneously making prudent investments in our selling capabilities, capacity expansion, technological differentiation, and in acquisitions which are all meant to catalyze future period growth.”

While the CEO is optimistic, the guidance is lower than what analysts expected as well and that’s probably what’s sending the stock down 5% in after hours trading.  The company is expecting to exceed previous estimates on the revenue side with revenues in the range of $1.75 – $1.85 billion, but that’s lower than analyst expectations of $2.04 billion.  They see EPS below the previously expected range of .70 – .80.

It will be interesting to see if WFR can retain support at its 50 day moving average tomorrow just below $11.  If it can’t, then it probably needs to return to test support around the $10 level at some point. 

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