Suntech Power Holdings Co., Ltd. (NYSE: STP), the world’s largest solar panel producer by volume, reported 3Q10 revenue of $743.7 million, representing growth of 19.0% sequentially and 57.2% year-over-year.
Income was reported at $33.1 million, or $0.18 per American Depository Share (ADS)
Gross profit margin for the core wafer to module business was 18.2%. Consolidated gross profit margin was 16.4%.
Total PV shipments increased 25.3% sequentially and 107.1% year-over-year.
"Shipments and revenues each hit new quarterly records and we reached production capacity of 1.6 gigawatts (GW). We are on track to achieve our goal of 1.8GW cell and module capacity by the end of this year," said Zhengrong Shi, Suntech Chairman and CEO.
In 4Q10, Suntech said it expects at least 10% sequential growth in shipments. Suntech targets to ship more than 1.5GW of solar products in 2010, representing year-over-year growth of at least 113%.
Consolidated gross margin in 4Q10 is expected to be approximately 17%, which is based on an assumed exchange rate of US$1.35 to the Euro.
Full year 2010 capital expenditures are expected to be approximately $350 million. Suntech targets to achieve 1.8GW of installed cell and module production capacity by the end of 2010.
Acquisition in China
In a separate announcement, Suntech said it is in the process of acquiring 375 MW of ingot and wafer slicing capacity in China.
The wafer manufacturing capacity is being spun off from a subsidiary of Glory Silicon Technology Investments (Hong Kong) Limited, in which Suntech holds an equity investment. Suntech will acquire the remaining 70% shares of the capacity for a total cash consideration of approximately $127 million, which is the total consideration after an offset of approximately $80 million of liabilities owed to Suntech.
Suntech will take operational control in 4Q10 and it is expected to be immediately accretive to earnings.
"Over the next 12 months, we intend to expand internal wafer capacity to 25% to 50% of our total cell and module capacity. This should enable us to significantly reduce wafer cost, and improve profitability," Shi said.
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