Saturday, January 29, 2011

MEMC Electronic Materials Inc. (NYSE: WFR): Q4 Earnings Preview 2010

MEMC Electronic Materials Inc. (NYSE: WFR) is scheduled to release its fourth-quarter financial results after the closing bell on Tuesday, February 1, 2011. Analysts, on average, expect the company to report earnings of 34 cents per share on revenue of $900.96 million. In the year ago quarter, the company posted a loss of 3 cents per share on revenue of $356.70 million.

MEMC Electronic Materials, Inc. designs, manufactures, and sells silicon wafers for the semiconductor industry worldwide. With manufacturing and research and development facilities in the United States, Europe and Asia Pacific, the Company enables high performance semiconductor and solar applications.

In the preceding third quarter, the St. Peters, Missouri-based company's net income was $17.6 million, or 8 cents a share, compared to a loss of $64.6 million, or 29 cents a share, in the year-ago quarter. On an adjusted basis, the company earned 10 cents a share in the latest quarter. Revenue climbed to $503.1 million from $310 million. Analysts, on average, expected the company to report earnings of 13 cents per share on revenue of $531.27 million.

At its last earnings call in November, MEMC Electronic also suspended its outlook for the rest of the year as it was unsure when it would record gains from the sale of a solar plant.

For the 2010 fourth quarter, the company expects better revenue performance, the successful completion of Rovigo funding and a positive free cash flow.

For fiscal 2011, MEMC expects the ramp-up in commercial production of several solar energy projects to boost results. Moreover, the opening of lower-cost fabs in Malaysia is expected to be accretive to margins

SunEdison, the solar energy development division of MEMC Electronic Materials Inc. (WFR), recently announced the final receipt of €230 million from First Reserve Corp. for the sale of a 70 megawatt (MW) photovoltaic (PV) power plant in Italy, near the town of Rovigo. In October 2010, First Reserve made an initial payment of €46 million to SunEdison. In October, SunEdison sold its solar plant in Rovigo, Italy, to First Reserve for a total consideration of €276 million, through a joint venture established between First Reserve and SunEdison. In May, SunEdison agreed to form a joint venture with First Reserve Corp., the world's leading private equity firm in the energy industry to fund current and future acquisitions totaling $1.5 billion of solar photovoltaic energy projects. 

The development and sale of the Rovigo power plant was a major achievement for SunEdison in 2010. Rovigo is expected to serve as a European model for large-scale, alternative energy projects and be environment-friendly. SunEdison developed the project jointly with financing partner, Banco Santander.  After the success of its Rovigo project, the solar energy unit of MEMC is presently working with project investors to develop the required finance structures, contacting local government agencies to understand their renewable energy goals and the consequent demand.

During the quarter in review, MEMC Electronic Materials announced it will partner with Flextronics to produce solar panels at a Flextronics facility in Ontario beginning in a few months.  The panels will be used my MEMC subsidiary SunEdison for projects in Ontario and the arrangement allows the company to capitalize on Ontario’s feed in tariff program which requires 60% of the materials to be produced locally.

Full Disclosure: None.
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