Suntech Power (NYSE:STP) is posting earnings results this morning that are in line with its competitors. Strong revenues and plummeting profits. Even when you take out the write off for the MEMC (WFR) and CSG Solar investments, the company still lost .19/share despite strong revenues of $830 million. Analysts had expected a profit from the company on revenues of $800 million. The CEO acknowledged it remains a highly competitive market and that it should remain so for some time.
"In a competitive market environment, our core operations performed well as customers continued to demonstrate their preference for Suntech’s superior quality and highly bankable solar products," said Dr. Shi, Suntech’s chairman and CEO. "With 48% shipment growth year-over-year, we achieved our shipment guidance and continued to improve our position in the Americas and emerging solar markets. Our pipeline to supply bankable utility-scale solar projects continued to build during the quarter, most notably with our 190MW partnership with Solarhybrid in Europe, and a recently-inked 200MW agreement for multiple projects in North America. We are also gaining traction in China’s utility solar market, which has been stimulated by the introduction of a national feed-in-tariff."
Looking ahead, the company expects PV shipments to increase 15% sequentially but also expects a $30 million loss relating to hedging. For the full year, the company expects to ship at 2.2GW of solar products and generate revenue of $3.2 – $3.4 billion which is lower than the previous estimate for $3.3 – $3.5 billion.
After initially rising at the open today, shares of STP have given up most of the gains and remain very weak technically. Sell volume continues to overshadow buy volume so it’s going to take some time before a definitive bottom can be called.