MEMC Electronics (WFR) Posts 1st Quarterly Loss In 7 Years

OK, this is a great example of an earnings report that can be reported positive by one news outlet (the mainstream) and reported negative by me after one time gains are removed.  You’ll find that most news outlets report the GAAP number which includes one time gains and losses, distorting the true organic growth or deterioration of a company.

Analysts had predicted that MEMC Electronics (WFR) would report its first quarterly loss since 2002 in the first quarter and right they were if you take out a one time $18.9 million tax benefit.  Excluding the one time gain, the company lost $16.9 million in the quarter which equates to a loss of .07/share.  Now it doesn’t look so good does it?  Revenues missed as well coming in at $214 million vs estimates of $217. 

Despite the quarterly loss MEMC is still in good standing financially..

“MEMC’s strong financial position with $1.3 billion in cash and investments and essentially no debt enables us to provide our team with the technology, resources, and support needed to strengthen our competitive position for the long term. As I continue to assess our strengths and weaknesses from a fresh perspective, I will focus on additional opportunities to improve our cost structure, enhance our product portfolio and drive innovation and entrepreneurial thinking throughout the company,” concluded Chatila.

Looking ahead to next quarter the company is seeing some signs of improvement although there is still a long ways to go.  Wafer pricing remains weak and factory utilization levels remain below normal operating levels.  Due to limited visibility the company is not providing guidance for revenues and margins.

This is not at all a good quarter from WFR and the stock reflects that dropping about 2% after hours. 

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