Solarfun (SOLF) Up Premarket After Beating Estimates; "Demand Appears To Be Improving"

Solarfun (SOLF) is trading up about 5% premarket after beating both on EPS and revenues.  The company posted a non GAAP EPS of .08/share vs the analyst estimate of a .04/share loss.  Revenues also came in better than expected (about $8 million higher) at $125 million.  Those numbers are still way off from the year ago quarter but a significant improvement sequentially, indicating that the financial bottom may be in for Solarfun.


– PV module shipments increased to 64.3MW (about 50% higher than a year ago and 85% higher than last quarter)
– Germany accounted for 83% of PV module shipments
– Czech Republic is a new market for company and accounted for 6% of shipments
– Avg selling price declined to US$2.66/watt vs  US$2.78/watt last quarter.  Company expects that to plunge further to $2.00 or lower by end of year
– China lending remains accommodative and company has about $85 million in untapped credit lines

The CEO commented: “These results reflect the significant progress we have made in reducing our raw material costs and returning the Company to profitability prior to the one-time, non-cash provision. This positions us well to aggressively compete for business going forward, and to do so profitably. We are determined to capture an increasing market share if demand for PV products recovers in the second half of 2009. The first shipments to Q-Cells as part of our multi-year manufacturing services agreement occurred during the second quarter and we look forward to higher volumes going forward.”

Looking ahead, the company expects to exceed 100MW in shipments for the 3rd quarter, then drop a bit to 80MW in the 4th quarter although company admits the visibility is low that far out.  The CEO went on to say that he sees the demand picture improving in the second half.

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