) reported breakeven earnings per share in the third quarter of
2013 which came ahead of the Zacks Consensus Estimate of loss of
11 cents per share. However, earnings were down from 30 cents
reported in the year-ago period.
On a GAAP basis, SunEdison reported third-quarter revenues of
$611.5 million, which increased 1.7% from the year-ago quarter
and beat the Zacks Consensus Estimate of $578 million.
Including direct sales and lease-back transactions, non-GAAP
revenues came in at $672 million, which decreased 5.2% from the
Segment-wise, revenues from Semiconductor Materials (35% to
total non-GAAP revenues) decreased 4% from the year-ago quarter
to $230.7 million primarily due to lower prices.
Revenues from the Solar Energy segment (65% of non-GAAP total
revenue) decreased 5.8% year over year to $441.3 million. The
decline was primarily due to lower pricing and sale of solar
projects and solar modules. However, the company witnessed higher
volumes in solar wafer sales.
During the quarter, SunEdison recognized revenues related to
75 MW of solar energy systems, towards the high end of the guided
range of 60 MW to 80 MW. The Solar Energy segment has a project
pipeline of 3.1GW while it has a backlog of 1.1GW, both
increasing from the comparable previous-year periods.
SunEdison's non-GAAP gross margins were down 646 basis points
(bps) from the year-ago quarter to 9.5% primarily due to a lower
revenue base. Moreover, lower pricing also impacted margins.
The company reported an operating loss of $45.8 million which
deteriorated from $85.2 million operating profit reported in the
year-ago quarter. The year-over-year decline was attributed to
lower pricing and prior-year benefit related to a favorable
During the quarter, SunEdison's marketing & administrative
expenses increased 32.2% and research & development expenses
increased 6.9% from the year-ago quarter to $91.1 million and
$18.6 million, respectively.
SunEdison reported non-GAAP net income of $1.7 million or
breakeven earnings compared to $70.4 million or 30 cents.
SunEdison exited the third quarter with cash, cash equivalents
and restricted cash of $757.4 million, up from $482.1 million in
the previous quarter, primarily due to share issuance coupled
with solar project financing and working capital management.
Long-term debt (excluding current portion) was $756.1 million
compared to $755.9 million in the previous quarter.
SunEdison used $102.6 million cash in operations compared with
$86.4 million in the previous quarter. The company incurred $31.6
million in capital expenditures.
For the fourth quarter of 2013, SunEdison expects
Semiconductor Materials revenues in the range of $220
million-$230 million and non-GAAP solar energy systems sales
volume in the range of 234 MW to 264 MW.
Average project pricing would range between $2.75/watt and
$3.50/watt. Capital spending is expected to be between $28
million and $38 million.
For fiscal 2013, Semiconductor Materials revenues are expected
to be between $920 million and $930 million (previously $940.0
million to $980.0 million). Solar energy systems sales volume is
expected in the range of 405 MW to 435 MW (previously 430 MW to
Average project pricing would remain between $3.10/watt and
$3.40/watt. Capital spending is still expected between $130
million and $140 million (previously $120.0 million and $140.0
Although SunEdison posted better-than-expected third-quarter
results, its year-over-year comparisons in every operational
metric were down. Solar systems sales were also lower than
expected. Fourth-quarter guidance was cautious and fiscal 2013
estimates were lowered. Moreover, the company expects a moderate
rise in its operating expenses, going forward. The price erosion
is also a concern for the company.
Though the Solar segment has not performed well, we believe
there is immense potential given the improving backlog and a
large project pipeline. Moreover, SunEdison is expected to
benefit from the rise in demand for solar energy and the
semiconductor business IPO that should further enable it to
concentrate on its core competencies.
However, competition from
First Solar Inc.
) is a concern. Currently, SunEdison has a Zacks Rank #3 (Hold).
Investors may also consider another technology stock,
), which carries a Zacks Rank #1 (Strong Buy).
FIRST SOLAR INC (FSLR): Free Stock Analysis
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SUNEDISON INC (SUNE): Free Stock Analysis
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