Friday, May 20, 2011

GT Solar (NASDAQ: SOLR): Q4 Earnings Preview 2011

GT Solar International, Inc. (NASDAQ: SOLR) is scheduled to release its fourth-quarter earnings after the closing bell on Monday, May 23, 2011. Analysts, on average, expect the company to report earnings of 34 cents per share on revenue of $223.64 million. In the year ago period, the company reported earnings of 23 cents per share on revenue of $194.68 million.

The company has 3 business segments - Polysilicon business, Photovoltaic business and Sapphire business. China accounts for a major part of the company's revenue - making up 62%, followed by Europe's 17% share, Korea's 13%, other Asian countries make up 6% while the U.S. accounts for 2%. ( data according to fiscal 2010 Annual Report).

In the preceding third-quarter, the Merrimack, New Hampshire-based company's net income was $63.58 million, or 46 cents per share, from $36.77 million, or 25 cents per share, in the year-earlier quarter. Revenue jumped to $262.90 million from $173.56 million in the comparable quarter a year ago. Analysts, on average, expected the company to report earnings of 38 cents per share on revenue of $251.91 million.

At its last earnings call in February, the company raised its fiscal year 2011 guidance for revenue to a range of $835 million to $860 million, up from the previously provided range of $775 million to $850 million. Earnings per share are now expected to be in the range of $1.15 to $1.19, up from the previously provided range of $1.08 to $1.18. 

For fiscal year 2012, the company expects revenue in the range of $850 million to $1 billion, and earnings in the range of $1.25 to $1.50 per share. 

The company has benefited from robust demand from photovoltaic customers and the buildup of potential orders in its newly acquired sapphire busines. GT Solar has won a flurry of orders in recent months, and the firm had said in December 2010 that it expects the sapphire business to be one of its key drivers in 2011. At its last earnings call, GT Solar announced an enhancement to the advanced sapphire furnace that will increase the output capacity to 100 kilograms per cycle.

Rwecently, the company  signed its largest polysilicon equipment deal -- and largest single deal in company history -- with South Korean polysilicon giant OCI. The order for polysilicon manufacturing equipment will be included in GT Solar's backlog for the quarter ending July 2. Last month, GT Solar received an order for its advanced sapphire crystallization furnaces totaling $218.9 million from Guizhou Haotian Optoelectronics Technology Co. LTD. The order marks HTOT's entrance into the fast-growing LED industry, and continues GT Solar's market momentum for its sapphire crystalline growth technology based on its advanced sapphire furnace. The order will be included in GT Solar's backlog for its current first quarter, FY12, which ends on July 2, 2011. In February, the company received an order valued at over $41 million for its advanced sapphire crystallization furnaces. 

The solar industry is expected to experience a year of slowing growth in 2011, and while equipment makers like GT Solar are viewed by many as defensive plays for a period of uncertainty, it's a positive that GT Solar is having initial success in the LED market, and with a major customer, demonstrating the cross-selling potential.

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