Suntech Power Holdings Co. Ltd., a China-based PV manufacturer, reported that its first-quarter profit jumped 35%, as production gains helped offset tighter margins.
Revenue almost tripled to $246.7 million from $89.9 million in the same period a year ago. Analysts expected $228.1 million. Earnings increased to $26.1 million, or 16 cents per share, from $19.3 million, or 12 cents per share, from the same period last year. Excluding costs from moving some production elements from Japan to China, it earned 22 cents per share.
Analysts expected 21 cents per share.
Suntech’s PV production increased to 360 megawatts from 270 megawatts, although the company, while margins shrunk to 19.9% from 30.1%.
“The demand for our products has never been stronger and we already have firm purchase contracts in place for our entire 2007 projected output, which is notable given that this volume is more than double our 2006 output. In fact, we are already receiving purchase orders for 2008,” said Dr. Zhengrong Shi, Suntech’s Chairman and CEO.
“To capture ever increasing sales opportunities, we are exploring all options to bring forward plans to reach our goal of one gigawatt production capacity in 2010,” he said. “In the first quarter, we accelerated the installation of three 30MW production lines at our Luoyang facility, and ramped these lines to full operating capacity in April, several months ahead of schedule.”
Commenting on Suntech’s silicon supply, Dr. Shi noted, ‘We have secured all the silicon we need for our projected 2007 output. Depending upon the source of silicon supplier, our core wafer to module business non-GAAP gross margin ranges from a high of 35%, when produced with wafers from long-term, fixed price contracts, to a low of around 20%, when produced with wafers from contracts with spot-market pricing.”
Dr. Shi continued, ‘ Our margins were impacted in the quarter by the need to purchase more wafers with spot market pricing to meet the high demand for our product and compensate for slower than expected delivery from our long- term supply arrangements. The temporary delay in shipments from our long-term wafer suppliers has been resolved and shipments are currently back on track. We believe we are on course with our prior guidance for margin improvement beginning in the second quarter of 2007.”
Loading...