Bottom line. "STP was one of the only tier I solar companies without a negative 3Q11 pre-announcement. Revenue of $810mm was in line with guidance of over $800mm. Shipment growth of 16% q/q exceeded guidance of up 15% q/q. GM of 15.8% (or 13.3% with $20.2mm inventory provision) exceeded guidance of 11-13%. STP lowered 2011 shipment guidance with plans to reduce utilizations, inventory, accounts receivable, capex and opex. That said, non-Si module cost of 74c/W is higher than tier I China peers, leaving STP profitability in question. We revise our 4Q11 rev/EPS from $813mm/$0.04 to $509mm/$(0.33); 2012 from $2.45bb/$(0.49) to $2.13bb/$(0.33); and introduce our 2013 est $2.16bb/$0.46 and 2014 est $2.04bb/$0.64. Our new TP of $2.50 (Old $6.50) represents ~5.5x 2013 EPS.
3Q11 (Sep) Results Summary. Revenues of $809.8mm (down 2.5%q/q)/($0.34), inline with pre-announced guidance of >$800mm, vs consensus $776.1mm (down 6.6%q/q)/ $(0.19). Pro-forma GM was 15.8% (up 70bps q/q), above pre-announced guidance of 11-13%, excluding $20.2mm inventory write down. Shipments of 582.3MW (up 16%q/q) were in line with pre-announced guidance of up >15%. Non-GAAP OpM at 4.8% (down 20bps q/q) excludes $17.5mm of provision for contingent lawsuit. DSO of 88 days, down 6.6% q/q vs 95 days in 2Q11. DIO of 90 days, up 22.4% q/q vs 74 days in 2Q11. Total Cash $567.7mm, down 26.1% q/q vs $767.9mm in 2Q11. Total Debt $2366.3mm, down 2.7% q/q vs $2431.7mm in 2Q11. We estimate 3Q11 ASP of $1.33/W."
4Q11 and 2011 Guidance Summary. "New implied 4Q11 revenue guidance of $539.2mm, below cons at $694.6mm. New 4Q11 shipment guidance of 466MW, above implied shipment at 438MW (down 25.1% q/q)."
"New 2011 revenue guidance of $3-$3.1bb, below previous guidance of $3.2-$3.4bb and cons at $3.15bb. New 2011 shipment guidance of >2GW below previous guidance of 2.2GW. We estimate 4Q11 ASP of $1.11 and 2012 average of $1."
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
