Suntech Power (STP) is out this morning reporting preliminary results and the  company is warning of a big quarterly loss due to the end of its thin film operations and a bad investment Shunda Holdings.  The company is expected to report revenues in the range of $620 – $630 million which is above the analyst estimate of $585 million, but traders are likely to focus on that big quarterly loss, at least in the short term.  The company expects the total loss to be in the range of $147 – $179, which is an EPS loss of  .82 – 1.00/share.

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Due to the increasing competitiveness of crystalline solar cells, STP has decided to abandon its thin film operations to focus exclusively on the crystalline cells and will incur a charge of $50 – $55 million in the quarter for the restructuring.  They are also expected to incur a charge of between $106 – $126 million related to its investment in Shunda Holdings which is undergoing a big reorganization.

CEO of Suntech commented: “While the thin film and Shunda related charges will significantly impact our second quarter financial results, they have no bearing on our core manufacturing operations which are performing very well. Going forward, we will continue to focus on our primary mission of supplying the most reliable and high performance solar panels in the industry.”

Shares of STP are currently down about 3% in pre-market trading.  Today is an important day because the stock has been holding at support of the 50 day moving average around the $10 level, so take that level out today with heavy volume and STP is probably headed for a retest of the lows around 8.40.