Suntech turns to loss in Q3 2011

Nov 22, 2011 - Chinese solar product maker Suntech Power Holdings Co Ltd (NYSE:STP) Tuesday posted a third-quarter net loss of USD 116.4 million (EUR 86m), against a net profit of USD 33.1 million a year earlier.

Gross margin declined to 13.3% from 17.9% a year before. Falling average selling prices have been weighing on the margins and bottom lines of many solar product makers this year. Suntech expects its gross margin to further drop to between 9% and 11% in the fourth quarter of 2011.

Third-quarter revenue improved to USD 809.8 million from USD 743.7 million, while photovoltaic (PV) product shipments rose by 36% year-on-year. Still, the company guided for a 20% quarter-on-quarter decrease in shipments in the fourth quarter of the year.

"We expect excess capacity to fuel strong competition and consolidation in the next two to three quarters," chairman and CEO Zhengrong Shi said. As a result, the company plans to cut operating costs by 20% in 2012, keep on-hold capacity expansions next year and bolster its working capital by USD 200 million by end-2011, it said.

As at September 30 Suntech had cash and cash equivalents of USD 458.4 million.

(USD 1.0 = EUR 0.738)

Choose your newsletter by Renewables Now. Join for free!