Suntech Power (STP) Reports Mixed Results, Testing Yearly Low

Suntech Power (STP) continues to get punished and is testing the yearly lows today after reporting earnings that were shy of analyst estimates on the EPS side.  The company reported an EPS of .18/share vs the analyst estimate for .23 on revenues of $744 million vs the analyst estimate of $713 million.  Gross margin slipped sequentially from 18.2% to 16.4% due to a decrease in ASP.

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CEO Zhengrong Shi commented on the quarter: “In the third quarter, we continued to diversify our sales globally and participated in high profile solar projects across Europe, the Americas, and Asia Pacific. In Europe, we supplied a 5MW project in Thiva, which is one of the largest grid connected solar projects in Greece. In Asia Pacific, we were selected for phase two of a 44MW project in Thailand. And we recently opened our module manufacturing facility in Goodyear, Arizona, which will help us to service the accelerating demand in the Americas.  Indicative of our rapid market penetration, we sold more product in the Americas in the third quarter of 2010 than we did in the full year 2009.

“We are also pleased to announce we are in the process of extending our vertical integration into the wafer segment of the solar value chain. As we expand our internal wafer manufacturing capacity, we are confident we will have an improving earnings profile as we benefit from lower wafer cost. Upstream integration is in line with Suntech’s strategy to continue to reduce the cost of solar energy and stimulate greater global adoption of clean, renewable energy,” said Dr. Shi.

Not an awful quarter from STP, but traders obviously looking for more and this stock having a heck of a time getting anything going.  I still think that one day it will offer a real nice entry point, but obviously that day appears far off. 

Looking ahead the company sees at least a 10% increase in shipments for Q4 and targets shipments of 1.56GW for 2010.  That’s above the 1.5GW guidance it gave after the last earnings report.

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