Suntech Power Holdings Co (NYSE:STP)

First Quarter 2012 Results

• 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 compared to  net income of $31.9 million, or $0.17 per diluted ADS, for the first quarter of 2011.
• 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."

Business Outlook

Suntech expects shipments in the second quarter of 2012 to increase by more than 20% from the first quarter of 2012.

Gross margin in the second quarter of 2012 is expected to be in the range of 3% to 6%.

For the fiscal year ending December 31, 2012, Suntech maintains the guidance for shipments to be in the range of 2.1GW to 2.5GW.

Suntech expects to maintain cell and module production capacity at 2.4GW and wafer capacity at 1.6GW in 2012. Full year 2012 capital expenditures are expected to be in the range of $120 million to $150 million. Capital expenditures will primarily be related to payments for equipment and services already received, and technology upgrades to production lines.

SAN FRANCISCO, May 18, 2012 /PRNewswire-Asia/ -- Suntech Power Holdings Co., Ltd. (NYSE: STP), the world's largest producer of solar panels, offers the following statement regarding the U.S. Department of Commerce's preliminary decision to impose antidumping duties (AD) of 31.22% on Suntech's crystalline silicon photovoltaic cells imported from China.

"These duties do not reflect the reality of a highly-competitive global solar industry. Suntech has consistently maintained a positive gross margin as revenues are higher than our cost of production. We will work closely with the Department of Commerce prior to their final decision to demonstrate why these duties are not justified by fact," said Andrew Beebe, Suntech's Chief Commercial Officer.

"As a global company with global supply chains and manufacturing facilities in three countries, including the United States, we are providing our U.S. customers with hundreds of megawatts of quality solar products that are not subject to these tariffs," continued Mr. Beebe.

"Despite these harmful trade barriers, we hope that the U.S., China and all countries will engage in constructive dialogue to avert a deepening solar trade war. Suntech opposes trade barriers at any point in the global solar supply chain. All leading companies in the global solar industry want to see a trade war averted. We need more competition and innovation, not litigation," continued Mr. Beebe.

SCHAFFHAUSEN, Switzerland, May 15, 2012 /PRNewswire-Asia/ -- Suntech Power Holdings Co., Ltd. (NYSE: STP), the world's largest producer of solar panels, and Krannich Solar, a leading value added distributor of complete systems, components and pre-packaged systems, announced an agreement for Suntech to supply up to 120 megawatts of solar panels in 2012.

Under the terms of the agreement, Suntech and Krannich Solar will continue to build on their solid relationship, going back to 2007, to provide high quality solar systems for resellers and installers throughout Europe and Australia.

"Over the past few years, we have noticed a clear trend where end-customers are increasingly choosing proven and reliable products to secure their solar investments," said Vedat Guergeli, Vice President Sales and Marketing, Suntech Europe. "We're excited to continue our strong relationship with Krannich Solar as we both share the same dedication to quality and product performance and are focused on building a strong local presence and consumer trust."

Founded in 1995, Krannich Solar is one of the top five PV systems providers in Europe today. Krannich Solar's range of solar products is guided by one key principle: each and every product is put through its paces in terms of testing and quality. Products and components are included only if they are error-free and work perfectly with one another.

"We have always focused on quality - even at the peak of the solar market boom - and this strategy has been successful," said Kurt Krannich, founder of Krannich Solar. "For us, it is of the upmost importance to cooperate with global solar brands, like Suntech, that are renowned for reliability and quality."

Fourth Quarter 2011 Highlights

• Total net revenues were $629.0 million.
• Total PV shipments decreased 9.7% sequentially and increased 3.2% year-over-year.
• Gross profit margin was 9.9%.
• Net loss attributable to holders of American Depository Shares (ADS) was $136.9 million, or $0.76 per diluted ADS.
• Improved accounts receivable and inventory by $489.6 million from the third quarter of 2011.
• Generated positive operating cash flow of $240.1 million.

"In the fourth quarter, our customers continued to demonstrate their preference to work with global suppliers that are dedicated to delivering high performance and superior quality solar panels," said Dr. Zhengrong Shi, Suntech's chairman and CEO. "With strong demand ahead of subsidy reductions in multiple markets, we again exceeded our shipment guidance and met our gross profit target for the fourth quarter of 2011."

"In 2011, we continued to invest in our customer service capabilities and built on our foundation as a leading global brand. This was recognized in the EuPD's independent survey amongst end-customers in Germany,France and Italy that selected Suntech as the first China-based company to receive the Top PV Brand award. We are committed to driving further product and service innovation in the industry to ensure we continue to deliver the best value proposition to our customers.

"Looking into 2012, we expect excess capacity and further policy adjustments in Europe and the U.S. will result in a sustained period of intense competition in the solar industry. In this context, our top priorities are to continue to drive down our production cost, invest in channel development and bring to market the most competitive product offerings. These actions will help us maintain our position as the leading supplier of solar products."

Business Outlook

As a result of lower than expected inventory level and seasonal weakness in demand, Suntech expects shipments in the first quarter of 2012 to decline by approximately 30% from the fourth quarter of 2011. Gross margin in the first quarter of 2012 is expected to be in the range of 3% to 6%. For the fiscal year ending December 31, 2012, Suntech expects shipments to be in the range of 2.1GW to 2.5GW. Suntech expects to maintain cell and module production capacity at 2.4GW and wafer capacity at 1.6GW in 2012. Full year 2012 capital expenditures are expected to be in the range of $120 million to $150 million.

SAN FRANCISCO and WUXI, China, February 17, 2012 /PRNewswire-Asia/ -- Suntech Power Holdings Co., Ltd. (NYSE: STP), the world's largest producer of solar panels, today announced preliminary financial results for the fourth quarter and full year ended December 31, 2011.

Suntech exceeded shipment guidance for the fourth quarter of 2011. The Company previously expected shipments to decline by approximately 20% from the third quarter of 2011, but currently anticipates shipments to decline by approximately 10% from the third quarter of 2011. Revenues in the fourth quarter of 2011 are expected to be in the range of $610 million to $630 million. Gross margin is expected to be in the middle of the previously guided range of 9% to 11%.

Suntech expects shipments for the full year 2011 to be approximately 2.09GW, above previous guidance of 2GW. Revenues for the full year 2011 are expected to be in the range of $3.13 billion to $3.15 billion.

In the fourth quarter of 2011, due to continuing stringent working capital management, Suntech significantly reduced accounts receivable and inventory by a total of approximately $450 million, which was partially offset by an approximate $85 million decrease in accounts payable. This result exceeds Suntech's stated goal to reduce accounts receivable and inventory by a total of $200 million in the fourth quarter of 2012. Net debt declined by approximately $200 million in the fourth quarter of 2011. Cash and restricted cash increased from $567.7 millionas of September 30, 2011 to over $700 million as of December 31, 2011.

Dr. Zhengrong Shi, Suntech's Chairman and CEO, said, "Our sales and operations teams both performed well in the fourth quarter, enabling us to achieve key goals and improvements across our business. We exceeded shipment guidance and improved our cash position through ongoing management of accounts receivable and inventory. We also completed the impairment assessment for the third quarter of 2011. The charges that we incurred were all non-cash and will not impact our operations moving forward. We will continue to implement the initiatives necessary to maintain our position as the leading supplier of solar panels."

Third Quarter 2011 Results

Second Quarter 2011 Results

• Total net revenues for the second quarter of 2011 were $830.7 million, compared to $877.0 million in the first quarter of 2011 and $625.1 million in the second quarter of 2010.
•  Non-GAAP net loss in the second quarter of 2011 was $33.8 million, or $0.19 per diluted ADS vs. Non-GAAP net income of $5.8 or $0.03 per diluted ADS.

We require a significant amount of cash to fund our operations, especially prepayments and loans to suppliers to secure our polysilicon and silicon wafer requirements. We also require cash generally to meet future capital and capacity expansion requirement, which are difficult to plan in the rapidly changing PV industry.

In 2009 and 2010 we financed our operations primarily through short-term and long-term bank borrowings, proceeds from the follow-on offering of ADSs in May 2009, and $50 million convertible loan received from the IFC, a member of the World Bank Group, in June 2009.

We believe that our current cash and cash equivalents and anticipated cash flow from operations will be sufficient to meet our anticipated cash needs, including our cash needs for working capital and capital expenditures for at least the next 12 months. We may, however, require additional cash to repay existing debt obligations or to re- finance our existing debts or due to changing business conditions or other future developments.

In 2009 and 2010 we financed our operations primarily through short-term and long-term bank borrowings, proceeds from the follow-on offering of ADSs in May 2009, and $50 million convertible loan received from the IFC, a member of the World Bank Group, in June 2009.

Capital Expenditures

We made capital expenditures of $337.5 million, $142.6 million, and $335.6 million in 2008, 2009, and 2010, respectively. In the past, our capital expenditures were used primarily to purchase manufacturing equipment to expand our manufacturing lines for the production of PV cells and modules. A large portion of our capital expenditures in 2008 were also used to acquire land use rights for the building of manufacturing facilities. We estimate that our capital expenditures in 2011 will be approximately $250.0 million to $270.0 million, which will be used primarily for the expansion of our internal ingot, wafer, and PV cell capacities, as well as further investment in the capacity of modules based on high efficiency Pluto technology. We plan to fund the balance of our 2011 capital expenditures substantially with cash generated from operations and borrowing from third parties.

First Quarter Results:

• Total net revenues were $877.0 million in the first quarter of 2011, representing a sequential decrease of 7.2%, and an increase of 49.1% year-over-year.
• Total PV shipments decreased 3.1% sequentially, and increased 62.9% year-over-year.
• Consolidated gross profit margin was 19.0% in the first quarter of 2011, compared to 16.2% in the fourth quarter of 2010 and 19.5% in the first quarter of 2010.
• Net income attributable to holders of ordinary shares was $31.9 million, or $0.17 per diluted American Depository Share (ADS). Each ADS represents one ordinary share.
• Suntech achieved 2.2GW of PV cell and module capacity, and 1GW of silicon ingot and wafer capacity as of the end of the first quarter of 2011.

Mr. David W. King succeeded Ms. Amy Zhang as Chief Financial Officer in May 2011.

"The first quarter of 2011 was a solid quarter that demonstrated the resilience of Suntech's business model under challenging market conditions," said Dr. Zhengrong Shi, Chairman and CEO. "Despite a slight sequential decline in our shipments related to policy uncertainty in Italy, a long winter in Germany and first quarter seasonality, we improved our gross margin from the fourth quarter and continued to diversify our sales across global markets. These outcomes reflect our ongoing efforts to enhance our competitiveness, mitigate policy risk, and position Suntech to increase our share in high-growth emerging markets. In particular, we were pleased to see greater demand in the Chinese solar market during the first quarter."

In the second quarter of 2011, Suntech expects low single digit growth of PV shipments and relatively flat gross margin compared with the first quarter of 2011.

For the fiscal year ending December 31, 2011, Suntech reiterates shipment guidance of 2.2GW of solar products. Due to pricing pressure, Suntech has revised its full year revenue guidance to a range of $3.3 billion to $3.5 billion, subject to changes in foreign exchange rates. Consolidated gross margin for the full year 2011 is now expected to be in the high teens.

Suntech expects to achieve 2.4GW of installed cell and module production capacity by the end of the second quarter 2011, of which 600MW of PV cell capacity will be owned and operated by a joint venture. Suntech expects to achieve 1.2GW of installed wafer capacity by the end of 2011. Full year 2011 capital expenditure expectations are maintained in the range of $250 million to $270 million.

Fourth Quarter Revenue:

• Total net revenues were $945.1 million in the fourth quarter of 2010, representing growth of 27.1% sequentially and 61.9% year-over-year.
• Gross profit margin for the core wafer to module business was 17.4% in the fourth quarter of 2010.
• Consolidated gross profit margin was 16.2% in the fourth quarter of 2010.
• Net income after taxes before non-controlling interest and equity in earnings of affiliates was $61.1 million in the fourth quarter of 2010.
• Net income attributable to holders of ordinary shares was $383.4 million, or $2.02 per diluted American Depository Share (ADS). Each ADS represents one ordinary share.

"2010 was another landmark year for Suntech and the solar industry," said Dr. Zhengrong Shi, Chairman and CEO. "We surpassed our shipment and revenue targets by setting new solar industry records for both quarterly and annual solar panel shipments.

For the fiscal year ending December 31, 2011, Suntech expects to ship at least 2.2GW of solar products and generate revenues of $3.4 billion to $3.6 billion, subject to changes in foreign exchange rates.

Third Quarter 2010 Highlights

• Total net revenues were $743.7 million in the third quarter of 2010, representing growth of 19.0% sequentially and 57.2% year-over-year.

• Total PV shipments increased 25.3% sequentially and 107.1% year-over-year.

• Gross profit margin for the core wafer to module business was 18.2% in the third quarter of 2010.

• Consolidated gross profit margin was 16.4% in the third quarter of 2010.

• GAAP net income attributable to holders of ordinary shares was $33.1 million, or $0.18 per diluted American Depository Share (ADS) vs. $0.16.Each ADS represents one ordinary share.

"The third quarter was a highly productive period for Suntech," said Dr. Zhengrong Shi, Chairman and CEO.  "Shipments and revenues each hit new quarterly records and we reached production capacity of 1.6GW. We are on track to achieve our goal of 1.8GW cell and module capacity by the end of this year."

"In the third quarter, we continued to diversify our sales globally and participated in high profile solar projects across Europe, the Americas, and Asia Pacific. In Europe, we supplied a 5MW project in Thiva, which is one of the largest grid connected solar projects in Greece. In Asia Pacific, we were selected for phase two of a 44MW project in Thailand. And we recently opened our module manufacturing facility in Goodyear, Arizona, which will help us to service the accelerating demand in the Americas.  Indicative of our rapid market penetration, we sold more product in the Americas in the third quarter of 2010 than we did in the full year 2009," Dr. Shi continued.

"We are also pleased to announce we are in the process of extending our vertical integration into the wafer segment of the solar value chain. As we expand our internal wafer manufacturing capacity, we are confident we will have an improving earnings profile as we benefit from lower wafer cost. Upstream integration is in line with Suntech's strategy to continue to reduce the cost of solar energy and stimulate greater global adoption of clean, renewable energy," said Dr. Shi.

Business Outlook

In the fourth quarter of 2010, Suntech expects at least 10 percent 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 the fourth quarter of 2010 is expected to be approximately 17%, which is based on an assumed exchange rate of 1.35USD to the Euro.

GSF is in the process of constructing a further 140MW of projects, of which at least 80MW are expected to be completed in the fourth quarter of 2010. As a result Suntech expects that the fair value of those projects will increase significantly and Suntech will recognize a related gain in earnings of affiliates in the fourth quarter of 2010. As each of the economics and timing of completion of these projects is different it is difficult to provide an accurate estimation of the gain at this time.

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.

Suntech expects third quarter 2009 shipments to be more than 50% above the second quarter 2009. Gross margin in the third quarter of 2009 is expected to be relatively flat compared to the second quarter of 2009.

Suntech expects shipments in the fourth quarter of 2009 to be slightly lower than the third quarter of 2009 due to seasonality. As a result, Suntech has revised full-year 2009 shipment expectations to approximately 600MW. Suntech intends to hold PV cell production capacity at 1GW in 2009 until demand visibility improves. Suntech expects capital expenditures to be in the range of $100 million to $120 million in 2009.

Source: PR Newswire (August 20, 2009)

''Considering the impact of seasonality, global economic headwinds, a contraction in PV project financing and falling sales prices, which greatly affected companies throughout the solar industry, we are pleased to have achieved revenues only 24% below the fourth quarter of 2008. This indicates the flexibility of Suntech's business model and customer preference for Suntech products,' said Dr. Zhengrong Shi, Suntech's Chairman and CEO. 'We are also pleased to have delivered a substantial sequential improvement in our gross margin, which demonstrates the success of our initiatives to reduce raw material costs and improve our non-silicon cost structure.''

''Suntech expects moderate revenue growth in the second quarter of 2009. Suntech expects full-year 2009 shipments to be in the range of 600MW to 700MW reflecting a constrained project financing environment and the resultant limited demand visibility. Suntech intends to hold PV cell production capacity at 1GW in 2009 until demand visibility improves. Suntech expects capital expenditures of approximately $100 million in 2009.''

These statements constitute 'forward-looking' statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as 'will,' 'expects,' 'anticipates,' 'future,' 'intends,' 'plans,' 'believes,' 'estimates' and similar statements, and includes our ability to maintain profitability in 2009, our ability to address demand growth in each of China, Japan and the U.S., the ability of GSF and Gemini Solar to close transactions in their related pipelines, our ability to develop new technology in collaboration with the Swinburne University of Technology, estimated Q2 2009 revenue and gross margin, and estimated full year 2009 shipments and capital expenditures. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in Suntech's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. Suntech does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

GeoNote®

On February 20, 2009, in spite of adverse market conditions and ongoing discussions, the Company received a letter from DC Chemical Co., Ltd., one of the Company’s suppliers of polysilicon, alleging that a subsidiary of the Company had failed to remit advance payments on January 27, 2009 and February 1, 2009 under the terms of its long term supply agreements. While the Company does not believe it has breached the agreements, it intends to continue to engage in discussions with DC Chemical Co., Ltd. to reach an amicable resolution to the matter. The Company believes that even excluding amounts of polysilicon under the long term supply agreements with DC Chemical, the Company has adequate alternative supplies of polysilicon and wafers to meet its requirements.

Source: SEC Form 6K (February 23, 2009)

Guidance Report:

First Quarter Fiscal 2009 Guidance Ending March

Source: PR Newswire (February 18, 2009)