Record-setting revenue but a soft gross margin. Almost $1B in revenue in Q4, almost $3B for the year.Suntech Reports Big Q4 and $3B in 2010 Revenue, Stock Rallies
Suntech Power Holdings (NYSE: STP), is the world's largest producer of solar panels and the Chinese firm just announced financial results for its fourth fiscal quarter and the full year 2010. The firm shipped 1.5 gigawatts for the year for a growth of 124.5 percent year-over-year and finished the year with a 17 percent gross profit margin and 16.2 percent for the quarter. Wall Street analysts will worry about the decrease in margins. A move towards upstream integration with a wafer production facility acquisition might temper analyst worries. Guidance shows good growth in revenue and margin for 2011.
Fourth Quarter 2010 Highlights
* Total net revenues were $945.1 million in the fourth quarter of 2010, representing growth of 27.1 percent sequentially and 61.9% year-over-year.
* Total PV shipments increased 19.8% sequentially and 87.3 percent year-over-year.
* Consolidated gross profit margin was 16.2 percent in the fourth quarter of 2010.
Full Year 2010 Financial Highlights
* Total net revenues were $2,901.9 million in 2010, representing 71.4 percent growth year-over-year.
* Total PV shipments were 1,572 megawatts, representing 124.5 percent growth year-over-year.
* Consolidated gross profit margin was 17.4 percent.
* Suntech achieved 1.8 gigawatts of PV cell and module capacity, and 500 megawatts of silicon ingot and wafer capacity as of December 31, 2010.
Other 2010 Highlights
* Suntech was selected to supply a 150 megawatt (AC) project for Sempra Generation. We covered that 800,000 panel order win here.
* The firm closed its acquisition of a wafer production facility, In the fourth quarter, Suntech had $24 million in equity income from the wafer business.
* Suntech signed a framework agreement with Siemens Energy. Siemens has a pipeline to develop 80 megawatts of PV plants in six different countries.
Business Outlook
* In the first quarter of 2011, Suntech looks for PV shipments to be relatively flat compared with the fourth quarter of 2010.
* Due to the integration of wafer manufacturing capacity, consolidated gross margin in the first quarter of 2011 is expected to increase to approximately 20 percent.
* For the 2011 fiscal year, Suntech expects to ship at least 2.2 gigawatts of solar products and generate revenues of $3.4 billion to $3.6 billion.
* Consolidated gross margin for the full year 2011 is expected to be approximately 20 percent to 22 percent.
* Suntech expects to achieve 2.4 gigawatts of installed cell and module production capacity by the end of 2011.
Suntech shares rose to $9.60 in extended trade after closing at $9 on the New York Stock Exchange.
A Note on Margins
Here's the margin picture for Suntech over the past few years:
anImage
Here's a margin snapshot for Suntech and some of its sector and industry peers and direct competitors from December 2010. Source: Capital IQ, a division of Standard & Poor's. TTM = trailing 12 months.
Suntech Power Holdings (NYSE: STP), is the world's largest producer of solar panels and the Chinese firm just announced financial results for its fourth fiscal quarter and the full year 2010. The firm shipped 1.5 gigawatts for the year for a growth of 124.5 percent year-over-year and finished the year with a 17 percent gross profit margin and 16.2 percent for the quarter. Wall Street analysts will worry about the decrease in margins. A move towards upstream integration with a wafer production facility acquisition might temper analyst worries. Guidance shows good growth in revenue and margin for 2011.
Fourth Quarter 2010 Highlights
* Total net revenues were $945.1 million in the fourth quarter of 2010, representing growth of 27.1 percent sequentially and 61.9% year-over-year.
* Total PV shipments increased 19.8% sequentially and 87.3 percent year-over-year.
* Consolidated gross profit margin was 16.2 percent in the fourth quarter of 2010.
Full Year 2010 Financial Highlights
* Total net revenues were $2,901.9 million in 2010, representing 71.4 percent growth year-over-year.
* Total PV shipments were 1,572 megawatts, representing 124.5 percent growth year-over-year.
* Consolidated gross profit margin was 17.4 percent.
* Suntech achieved 1.8 gigawatts of PV cell and module capacity, and 500 megawatts of silicon ingot and wafer capacity as of December 31, 2010.
Other 2010 Highlights
* Suntech was selected to supply a 150 megawatt (AC) project for Sempra Generation. We covered that 800,000 panel order win here.
* The firm closed its acquisition of a wafer production facility, In the fourth quarter, Suntech had $24 million in equity income from the wafer business.
* Suntech signed a framework agreement with Siemens Energy. Siemens has a pipeline to develop 80 megawatts of PV plants in six different countries.
Business Outlook
* In the first quarter of 2011, Suntech looks for PV shipments to be relatively flat compared with the fourth quarter of 2010.
* Due to the integration of wafer manufacturing capacity, consolidated gross margin in the first quarter of 2011 is expected to increase to approximately 20 percent.
* For the 2011 fiscal year, Suntech expects to ship at least 2.2 gigawatts of solar products and generate revenues of $3.4 billion to $3.6 billion.
* Consolidated gross margin for the full year 2011 is expected to be approximately 20 percent to 22 percent.
* Suntech expects to achieve 2.4 gigawatts of installed cell and module production capacity by the end of 2011.
Suntech shares rose to $9.60 in extended trade after closing at $9 on the New York Stock Exchange.
A Note on Margins
Here's the margin picture for Suntech over the past few years:
anImage
Here's a margin snapshot for Suntech and some of its sector and industry peers and direct competitors from December 2010. Source: Capital IQ, a division of Standard & Poor's. TTM = trailing 12 months.
| Company | TTM Gross Margin | TTM Operating Margin | TTM Net Margin |
|---|---|---|---|
| Suntech Power Holdings | 19.3% | 10.8% | (3%) |
| Trina Solar (NYSE: TSL) | 31.7% | 22% | 14.1% |
| JA Solar Holdings (Nasdaq: JASO) | 22.4% | 17.1% | 12.3% |
| MEMC Electronic Materials (NYSE:WFR) | 15.7% | (0.9%) | 0.8% |
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