Thursday, Photovoltaic cells and modules maker Solarfun Power Holdings Co., Ltd. (SOLF), updated its business outlook for the third quarter and said it now expects quarterly revenues to increase on a sequential basis, citing an improvement in end market demand and healthy margins. In the morning hours of trading, shares of Solarfun Power surged more than 12% on higher than average volume.
The Qidong, China-based company said it now expects revenues for the third quarter to be in the range of RMB 918.00 million to RMB 984 million, up from its second quarter revenues of RMB 854.61 million.
On average, eight analysts polled by Thomson Reuters currently expect the company to report revenues of US$163.14 million for the quarter. Analysts' estimate typically exclude one-time charges and gains.
During the second quarter the company's revenues had dipped 36.8% year-over-year. Photovoltaic modules revenue slid to RMB 742 million from RMB 1.23 billion, while photovoltaic cells revenue plummeted to RMB 5.54 million from RMB 104.22 million.
The company now expects total module shipments for the third quarter to exceed 100 MW, while gross margin is expected to be about 17%.
Peter Xie, president of Solarfun said, "The third quarter of 2009 is progressing well. Our order patterns are strong as we are seeing an improvement in end market demand. Our efforts to realign supply costs to reflect current market pricing combined with our increase in production capacity at our in-house ingot and wafer manufacturing facilities should allow us to achieve healthy margins in the third quarter."
The company indicated facing a highly competitive pricing environment, but said it remains fully confident in its ability to win business as market demand recovers.
SOLF is currently trading at $6.88, higher by $0.68 or 10.97%, on a volume of 2.19 million shares on the Nasdaq.
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