Chinese solar energy company Suntech Power Holdings Inc (STP.N) reported a 1Q09 profit and said it expects its revenues to grow in 2Q.
The company also said it will issue 20 million new American Depositary Shares (ADS) to fund repurchases and redemptions of securities.
Net income was $1.8 million or $0.01 per American Depository Share (ADS), compared with $46.7 million, or $0.27 cents a share, a year earlier.
Total net revenues fell 27% to $315.7 million.
Analysts were expecting a loss of $0.06 cents a share, on revenue of $350.4 million, according to Reuters Estimates. But the company was able to significantly improve its margin and cut operating expenses.
Gross margin improved to 17.8%, compared with 0.6% for 4Q08.
Operating expenses were reduced by 24% to $35.1 million in the quarter, from $46.2 million in 4Q08.
Suntech maintained PV cell production capacity of 1 gigawatt (GW) at the end of 1Q09. However the company said it expects full-year shipments to be in the range of 600-700 megawatts (MW).
"China’s recently announced national solar subsidy, Japan’s reintroduction of solar subsidies in 2009 and state incentive programs and the federal stimulus package in the U.S. should provide a strong foundation for mid-term growth," Suntech Chief Executive Zhengrong Shi said in a statement.
Suntech said it will use proceeds from the ADS offering for working capital and general corporate purposes, including repurchases and redemptions of its existing securities such as the repurchase obligation under its 0.25% Convertible Senior Notes Due 2012 issued in February 2007.
UBS Investment Bank, Goldman Sachs (Asia) L.L.C. and Deutsche Bank Securities Inc. will act as underwriters for the offering.
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