Suntech Power Holdings Company Ltd. (STP) is scheduled to report its fourth-quarter and fiscal 2011 financial results before the opening bell on Thursday, March 8, 2012. The current Zacks Consensus Estimate for quarterly earnings is pegged at 36 cents loss per American Depositary Share (‘ADS’). The Zacks Consensus Estimate projects revenues for the quarter to be $572 million.
The current Zacks Consensus Estimate for fiscal 2011 earnings is pegged at $2.26 loss per ADS. The Zacks Consensus Estimate projects revenues for fiscal 2011 to be $3,061 million.
Third Quarter 2011 Recaps
Suntech Power Holdings posted a third quarter loss of 55 cents per ADS, far wider than the Zacks Consensus Estimate of a loss of 21 cents per ADS. Results also came in below the year-ago adjusted earnings of 18 cents per ADS.
Suntech registered total net revenues of $809.8 million, compared with $830.7 million in the second quarter of 2011 and $743.7 million in the third quarter of 2010. Revenues in the reported quarter also missed the Zacks Consensus Estimate of $772 million.
The sequential decline of revenues was primarily due to a decline in the average selling price of Photovoltaic (“PV”) products. This was partially offset by an increase in shipments. Total PV shipments increased 16% sequentially and 36% year-over-year.
Management expects fourth-quarter net sales in the range of $610 million–$630 million. For the full year, management expects to generate revenues between $3.13 billion–$3.15 billion, with shipments anticipated at 2.09 GW. Gross margin is expected to be in the range of 9%–11%.
Fourth-Quarter 2011 Zacks Consensus
Earnings estimates for the fourth quarter of 2011, as provided by the analysts, range from a low of 71 cents loss to a high of 22 cents loss. Thus, the current Zacks Consensus Estimate for the quarter is pegged at 36 cents loss per share.
Agreement of Analysts
Over the past month, all the analysts covering the stock hold their ADS projections steady, keeping the stock to a Zacks #3 Rank (Hold).
Earnings History Misses Zacks
With respect to earnings surprises, Suntech Power Holdings has missed the Zacks Consensus Estimate in the preceding three quarters. Over thelast four quarters, the earnings surprise ranged from a negative 218.75% to a positive of 6.67%, with the average earnings surprise being a negative 106.35%.
Wuxi, China-based Suntech is a leading solar energy company. The company designs, develops, manufactures and markets photovoltaic (PV) cells and modules. The company produces solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered photovoltaic panels to over a thousand customers in more than 80 countries.
The company achieved 1.6 GW of silicon ingot and wafer capacity and 2.4 GW of cell and module capacity at the end of the third quarter of 2011.
In the fourth quarter 2011, Suntech anticipates shipments to decline by approximately 10% from the third quarter of 2011. Suntech expects shipments for the full year 2011 to be approximately 2.09GW.
In the near-term we assign a Zacks #3 Rank (short-term 'Hold' recommendation) for the stock. Over the longer run, our Neutral recommendation on the stock indicates that it should perform in line with the broader market. This is in line with its peers like JinkoSolar Holding Company Ltd. (JKS) and China Sunergy Company Ltd. (CSUN).