Suntech Power (STP) Beats On Earnings, Light On Revenues

Suntech Power (STP) is back in the black with improving margins, posting an EPS of .01 share vs analyst estimates of a .06/loss.  However, revenues were very light at $315 million, missing estimates of $360 million.  It represents the first quarter of negative quarter over quarter revenue growth in company history, so certainly not much reason for optimism on this report outside of the improving margins.  The CEO is enthusiastic though, noting that revenues “only” dropped 24% from last quarter.  Job well done!

“Considering the impact of seasonality, global economic headwinds, a contraction in PV project financing and falling sales prices, which greatly affected companies throughout the solar industry, we are pleased to have achieved revenues only 24% below the fourth quarter of 2008. This indicates the flexibility of Suntech’s business model and customer preference for Suntech products,” said Dr. Zhengrong Shi, Suntech’s Chairman and CEO. “We are also pleased to have delivered a substantial sequential improvement in our gross margin, which demonstrates the success of our initiatives to reduce raw material costs and improve our non-silicon cost structure.”

Looking ahead, the company expects full-year 2009 shipments to be in the range of 600MW to 700MW due to a tough financing environment and low visibility.  Production capacity is expected to be held at 1GW this year until demand visibility improves. 

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It should be noted the company has also announced a follow on offering which isn’t helping shares this morning.  The stock is trading down nearly 10% in pre-market trading.

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