Suntech Power Holdings Co. (STP) second-quarter earnings plunged 80% as revenue tumbled due to lower prices for its solar-power products, even though demand increased sequentially.
The solar power industry has been hurt by excess capacity, tight credit and bloated inventories, in contrast to the prior year when surging energy prices boosted demand. However, the sector is likely to benefit from favorable government policies in China and the U.S.
Suntech last month signed nonbinding agreements with four Chinese provinces and cities to develop up to 1.8 gigawatts of solar projects, enough to power 1.35 million to 1.8 million U.S. homes.
Chairman and Chief Executive Zhengrong Shi said, "A seasonal pickup in demand combined with a gradual thawing of global financial markets and improving project returns led to sequential shipment growth in most of our major markets."
The company expects shipments to rise 50% sequentially in the third quarter, but pull back slightly in the fourth quarter because of seasonality. As a result, it expects shipments for the year at the low end of its reduced May view for 600 to 700 megawatts. It also expected $100 million to $120 million in capital spending, compared with its earlier estimate of $100 million....MORE
The headline at Reuters is a bit cheerier:
