Suntech Power Holdings Company Ltd.
) announced it will stop production at its Goodyear, Arizona,
solar panel manufacturing facility on Apr 3, 2013, with
forty-three employees affected. Suntech said its decision is in
line with the company's global restructuring efforts to
rationalize production capacity and reduce operating expenses by
20% in 2013.
The need comes in the light of global oversupply and higher
production costs related to the import tariffs imposed by the
U.S. government. Earlier, in Nov 2012, the company halted two of
the three production shifts at its Arizona, facility.
Wuxi, China-based Suntech is a leading solar energy company.
The company designs, develops, manufactures and markets
photovoltaic (PV) cells and modules.
Suntech Power's predominantly China-focused manufacturing base
gives it a distinct cost advantage compared to its U.S. and
European peers. Also, its Pluto technology-enabled
multi-crystalline silicon modules can achieve higher conversion
efficiency. The increase in conversion efficiency helps the
company to capture market share from the crowded PV market.
Suntech expects to release its 2012 fourth quarterly numbers
on Apr 1, 2013. The company expects shipments of PV products in
the fourth quarter of 2012 to decline in a low single-digit
percentage rate compared to the third quarter of 2012. The gross
margin in the fourth quarter of 2012 is expected to be slightly
negative. Suntech also expects 2012 annual PV shipments in the
range of 1.7GW to 1.8GW.
Suntech Power is one of the largest producers of PV solar
modules under its proprietary Pluto technology with a
geographically diversified customer base. Other positive factors
for Suntech include ongoing expansion programs, higher conversion
efficiency through its Pluto technology-enabled modules, subsidy
program in China, and improving operating efficiencies. However,
the positives are overshadowed by fears of tepid module demand in
Europe, rising competition, the volatile Euro and the financial
stability of its customers. Suntech Power currently has a Zacks
Rank #3 (Hold).
Also, the current macro scenario does not bode well for the
solar industry, which thrives mainly on subsidies and grants. As
a result, major solar operators like
Canadian Solar Inc.
First Solar Inc.
Solar Power, Inc.
), all hold a Zacks Rank #3 (Hold).
CANADIAN SOLAR (CSIQ): Free Stock Analysis
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SUNTECH PWR HLD (STP): Free Stock Analysis
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