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Suntech Power Holdings – STP – Cost reduction continues to be the top priority for business

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Suntech Power Holdings Co., Ltd. (NYSE: STP), the world’s largest producer of solar panels, today announced financial results for its first quarter ended March 31, 2012.

STP Highlights

  • STP Total net revenues were $409.5 million.
  • Total PV shipments decreased 26.9% sequentially and 22.1% year-over-year.
  • Gross profit was $2.4 million and gross margin was 0.6%.  Gross profit and gross margin were impacted by a provision for preliminary U.S. countervailing and anti-dumping duties of $19.2 million, or 4.7% of revenues.
  • Net loss attributable to holders of American Depository Shares (ADS) was $133.0 million, or $0.74 per diluted ADS.
  • Improved accounts receivable and inventory by $65.2 million from the fourth quarter of 2011.
  • Cash and restricted cash totaled $663.8 million as of March 31, 2012.

“First quarter shipments were 27% lower than our fourth quarter shipments, which is better than our previous projection of a 30% decline. The sequential decrease in shipments was primarily due to limited inventory on hand early in the quarter and a planned reduction in our production level over Chinese New Year,” said Dr. Zhengrong Shi, Suntech’s chairman and CEO. “During the quarter, we reduced our total production cost by 6% sequentially, despite lower utilization, and maintained a healthy cash balance.”


“Cost reduction continues to be the top priority for our business and we have outlined a clear roadmap for the remainder of the year. Suntech’s differentiated technology development capability will play a vital role in driving ongoing cost reduction. For example, we recently launched a powerful 310 watt solar panel and a slim frame 60-cell panel, which has been designed to be one of the lightest in the industry. Innovations such as these increase system power output, lower shipping costs and improve ease-of-installation. Our innovation-based product development will reduce cost without compromising quality, and generate value for our customers.”

Commenting on the second quarter outlook, Dr. Shi said, “We anticipate more than 20% sequential growth in shipments in the second quarter as demand for high performance, bankable product increases across all our markets. Operationally, we will continue to streamline our wafer and module manufacturing operations, reduce cost and focus on cash management. These initiatives will further improve our financial position and set the platform for future growth.”

About Suntech – STP

Suntech Power Holdings Co., Ltd. (STP) produces industry-leading solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, Suntech has delivered more than 25,000,000 photovoltaic panels to over a thousand customers in more than 80 countries. STP’s pioneering R&D creates customer-centric innovations that are driving solar to grid parity against fossil fuels. Our mission is to provide everyone with reliable access to nature’s cleanest and most abundant energy source.








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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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