Suntech Reports 4Q Prelim Numbers - Analyst Blog
02 Mai 2013 - 6:00PM
Zacks
Suntech Power Holdings Co., Ltd. (STP) 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.
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 creditor claims.
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 ReneSola
Ltd. (SOL), STR Holdings, Inc. (STRI) and
Trina Solar Limited (TSL), all with a Zacks Rank
#2 (Buy).
RENESOLA LT-ADR (SOL): Free Stock Analysis Report
SUNTECH PWR HLD (STP): Free Stock Analysis Report
STR HOLDINGS (STRI): Free Stock Analysis Report
TRINA SOLAR LTD (TSL): Free Stock Analysis Report
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