Suntech reports first quarter 2012: $119.2 million loss from operations
Wuxi, China - Suntech Power Holdings Co., Ltd., producer of solar panels, announced financial results for its first quarter ended March 31, 2012.
Total net revenues for the first quarter of 2012 were $409.5 million, a decrease of 34.9% from $629.0 million in the fourth quarter of 2011 and a decrease of 53.3% from $877.0 million in the first quarter of 2011. The sequential decrease of revenues was due to a decline in shipments and a decline in the average selling price of PV products.
For the first quarter of 2012, gross profit was $2.4 million and gross margin was 0.6% compared to $62.3 million and 9.9%, respectively, in the fourth quarter of 2011; and $182.7 million and 20.8% in the first quarter of 2011. Gross profit and gross margin in the first quarter of 2012 were impacted by a provision for preliminary U.S. countervailing and anti-dumping duties of $19.2 million, or 4.7% of revenues. The sequential decline in gross margin was further impacted by sales price declining faster than the cost of production.
Operating Income and Margin
Loss from operations in the first quarter of 2012 was $119.2 million and operating margin was negative 29.1%, compared to loss from operations of $64.2 million and operating margin of negative 10.2% in the fourth quarter of 2011; and income from operations of $94.5 million and operating margin of 10.8% in the first quarter of 2011.
Net Income (Loss) and Earnings (Loss) per ADS
Net loss attributable to holders of ADS was $133.0 million, or $0.74 per diluted ADS, for the first quarter of 2012, compared to a net loss of $148.8 million, or $0.82 per diluted ADS, for the fourth quarter of 2011 and net income of $31.9 million, or $0.17 per diluted ADS, for the first quarter of 2011.
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.