) reported second-quarter 2013 adjusted loss per share of 19
cents, which was wider than the Zacks Consensus Estimate of 16
cent loss per share.
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The adjusted figure excludes the impact of direct sales and
lease-back from the Solar Energy segment as well as some tax
benefits and restructuring and impairment charges.
On a GAAP basis, SunEdison reported second-quarter revenues of
$401.3 million, which nearly halved from $808.4 million in the
year-earlier quarter. Reported revenues came much below the Zacks
Consensus Estimate of $462.0 million. Lower solar project sales
volume and weak semiconductor pricing led to the revenue
decrease. Pricing was mostly affected by industry-wide slowdown.
Including direct sales from the Solar Energy segment and
lease-back transactions, non-GAAP revenues came in at $491.6
million, which decreased 47.3% from the year-ago quarter.
Segment wise, revenues from Semiconductor Materials grew 2.7%
year over year to $239.0 million and was 59.6% of total revenue.
Segment revenues were within management's guided range of
$235.0-$245.0 million. The year- over-year improvement was mainly
due to higher volume offset by weaker pricing, yen headwinds and
unfavorable product mix.
The Solar Energy segment (which now includes Solar Materials)
accounted for 40.4% of total revenue. The segment generated
revenues of $162.3 million, down 71.8% year over year. The
decrease was due to lower project sales, partially offset
by better solar wafer sales.
During the quarter, most of the projects were under engineering,
planning and construction (EPC) only contract due to lower
development spending. This has led to lower revenues from solar
The Solar Energy segment sold 14 megawatts (MW) of solar energy
systems on a GAAP basis and 51 MW on a non-GAAP basis. This
compares with 144 MW and 169 MW sold, respectively in the
year-ago period. Projects interconnected during the second
quarter represented 22 MW in 17 projects. SunEdison also reported
that construction of 20 MW of systems is underway. The project
pipeline was 2.9 gigawatt (GW), up 218 MW compared with the prior
quarter and flat year over year. Project backlog increased 119 MW
sequentially to 1.0 GW.
Reported gross profit was $49.2 million, down 45.6% from the
year-ago quarter. Gross margin was 12.3% compared with 11.2% in
the year-ago quarter. Margin expansion was mostly due to cost
control measures, partially offset by lower pricing.
Operating loss was $46.6 million compared with a loss of $15.3
million in the year-earlier quarter. Operating margin was (11.6%)
compared with (1.9%) in the year-ago quarter.
Total operating expenses decreased 9.4% from the year-ago quarter
with marketing and administration expenses falling 8.6% and
research and development expenses decreasing merely 1.1%.
Reported net loss was $102.9 million or 44 cents per share
compared with net loss of $77.2 million or 33 cents in the
prior-year quarter. Adjusted loss per share was 19 cents compared
to earnings per share of 8 cents in the year-ago quarter.
Balance Sheet & Cash Flow
SunEdison ended the quarter with cash, cash equivalents and
restricted cash of $482.1 million, up from $476.2 million in the
previous quarter. Cash balance grew mainly due to financing
activities for solar projects and favorable working capital
management. Long-term debt was $755.9 million, slightly down from
$757.7 million in the previous quarter.
SunEdison used $86.4 million cash in operations compared with
$118.6 million in the preceding quarter. Capital expenditure was
$38.8 million, up from $30.8 million in the previous quarter.
For the third quarter of 2013, SunEdison expects Semiconductor
Materials revenues in the range of $230.0-$250.0 million and
non-GAAP solar energy systems sales volume in the range of 60 MW
to 100 MW.
Average project pricing would range between $3.25/watt and
$3.50/watt. Capital spending is expected between $30.0 million
and $40.0 million.
For fiscal 2013, Semiconductor Materials revenues are expected
between $940.0 million and $980.0 million (previously $960.0
million and $1.0 billion). Solar energy systems sales volume is
expected in the range of 430 MW to 500 MW (retained).
Average project pricing would remain between $3.10/watt and
$3.40/watt. Capital spending is still expected between $120.0
million and $140.0 million.
The company also mentioned that it is optimistic about gaining
operating leverage from ongoing cost reduction measures. Also, it
aims to reduce solar materials pricing with the help of
economical and flexible sourcing strategy. Management believes
that together these potential benefits would help SunEdison
deliver stronger results in 2013.
SunEdison posted a disappointing second quarter with a
wider-than-expected loss. Revenues, too, failed to encourage us
as it decreased almost 50% on a year-over-year basis. Solar
systems sales were also lower than expected. Third quarter
guidance was cautious too. But continuous expense control will
continue to support results.
Though the Solar segment has not performed well in the last two
quarters, we believe there is immense potential given improving
backlog and a large project pipeline. We also consider
SunEdison's recent tie-up with Brazil's Petrobras, to build one
of the largest solar photovoltaic power plants, encouraging. This
venture will help SunEdison to tap the Brazilian solar market and
Currently, SunEdison has a Zacks Rank #2 (Buy). Investors may
also consider other technology stocks that are performing well.
Spreadtrum Communications Inc.
) all have a Zacks Rank #1 (Strong Buy) and are worth buying.