Suntech Power Holdings Co. Ltd. (STP) said Friday it expects fourth-quarter revenues to come in ahead of analysts' estimates, due mainly to a lower-than-expected decline in shipments. The news sent Suntech Power shares up ten percent on the New York Stock Exchange.
The solar panel maker had earlier expected fourth quarter shipments to fall 20 percent from the third quarter, but preliminary results reveal a decline of only about 10 percent.
The company will try to make most out of the solar power development market that is set to shift from Europe to the U.S., China, India and Japan, as most of the countries are trying to find alternate sources of clean energy. Solar energy has started getting cheap, with solar companies now initiated to make more efficient panels. At the same time, intense competition within the industry has dragged down prices.
In early February, DuPont and Suntech announced that they would work together to help increase the supply of photovoltaic materials and technologies for the growing global market for solar energy.
Suntech expects fourth-quarter revenues in a range of $610 million to $630 million, which is above current market expectation of $554.68 million.
For the full year 2011, Suntech lifted its revenue guidance range to between $3.13 billion and $3.15 billion, from the previous guidance of $3.0 billion to $3.1 billion. Analysts' consensus currently estimate revenues of $2.40 billion for the year. Shipments for the full year is anticipated at 2.09 gigawatts, or GW, exceeding the previous outlook of 2 GW.
Chief Executive Zhengrong Shi said, "We exceeded shipment guidance and improved our cash position through ongoing management of accounts receivable and inventory. We also completed the impairment assessment for the third quarter of 2011. The charges that we incurred were all non-cash and will not impact our operations moving forward."
Suntech also said it initiated an assessment of its goodwill, intangibles, and certain investments and has recorded impairment charges of $571 million in the third quarter of 2011. This assessment was due to the challenging solar market conditions and the significant reduction in market capitalization in the third quarter, the company said in a statement.
STP is currently trading at $3.73, up $0.36 or 10.68%.
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