Suntech Power Holdings Co. Ltd. (NYSE: STP) reported Wednesday that its first-quarter profit rose to $31.9 million, or 17 cents per American Depository Share or ADS, compared to $20.71 million, or 11 cents per share, in the prior-year quarter. Revenue climbed to $877.00 million from $588.03 million last year. Analysts, on average, expected the company to report earnings of 36 cents per share on revenue of $864.82 million.
"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 reiterated 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.
Guidance is based on an assumed exchange rate of $1.41 USD to the Euro.
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