Suntech Power Holdings Co., Ltd.
) has provided preliminary financial results for the fourth
quarter and full year 2012 for the period ending Dec 31, 2012.
In the fourth quarter of 2012, revenues were approximately $358
million, down 8% from the sequentially preceding quarter.
Suntech's photovoltaic ("PV") products shipments also declined
sequentially by 4%. Approximately 91% of the revenues came from
sale of PV modules and the balance was generated from the sale of
PV systems, cells, silicon wafers and production equipment. Gross
margin for the quarter came in at 0.4%.
The Zacks Consensus Estimate for the fourth quarter of 2012 is
currently at $435 million.
For full year 2012, revenues were approximately $1,625 million,
down 48% on a year-over-year basis. However, shipments of 1.8
gigawatt (GW) were in line with the guidance. Of the total
revenue 92% came in from the sale of PV modules while the balance
8% was generated from the sale of PV systems, cells, silicon
wafers and production equipment. Gross margin for full year 2012
was negative 1.4% approximately. However, these results are
preliminary and are subject to further adjustments.
The Zacks Consensus Estimate for first quarter 2013 is
currently a loss of 51 cents per share.
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Suntech has in fact not released its quarterly results since the
second quarter of 2012. For the four quarters preceding that
period Suntech had incurred successive losses owing to a steep
fall in average selling prices of solar panels.
The company announced that it will delay the filing of its annual
report on Form 20-F for the fiscal year ended Dec 31, 2012 beyond
the filing deadline of Apr 30, 2013. This is due to the pending
restatement of the company's consolidated financial statements
for 2010 and 2011. In Dec 2012, the company announced its
intention to file restated consolidated financial statements for
2010 and 2011. Management stated that it will take additional
time to complete the restatement due to the pending reassessment
of the Global Solar Fund, S.C.A., Sicar ("GSF").
Also, the filing delay is due to the restructuring initiatives
taken by the company at Wuxi Suntech Power Co., Ltd. (Wuxi
Suntech), its main operating unit in China. Wuxi Suntech has sunk
into insolvency while Suntech Power International Ltd. ("SPI"),
the company's principal operating subsidiary in Europe, has
received a provisional moratorium for up to two months on
One other reason for the delay is that the company is in
discussions with major holders of the 3% Convertible Notes in
order to achieve a consensual restructuring. In Mar 2013, Suntech
received a notice of default and acceleration relating to
Suntech's non-payment of the principal amount of $541 million
that was due to holders of the Notes.
Currently, the company is facing the threat of losing the right
to trade. Last month, the New York Stock Exchange declared that
the company did not meet the NYSE's price criteria for continued
listing standard because, as of Apr 4, 2013, the average closing
price of the company's American Depositary Shares' ("ADS") was
less than $1.00 per ADS over a consecutive 30-trading-day period.
In spite of the many threats looming large it seems that the
company is undertaking a number of restructuring initiatives to
address its balance sheet and improve the cost structure and
operational efficiency. In March this year, the company announced
that it will stop production at its Goodyear, Ariz., solar panel
manufacturing facility. This decision comes in the wake of higher
production costs due to import tariffs on solar cells and
aluminum frames imposed by the U.S. government, as well as global
solar module oversupply.
The company presently retains a short-term Zacks Rank #3 (Hold).
Stocks worth considering in the space are
STR Holdings, Inc.
Trina Solar Limited
), all with a Zacks Rank #2 (Buy).