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Not Much Light For Investors: Suntech Power Reports Preliminary Q4 And Full Year 2012

May 1, 2013

As investors anxiously await whether or not solar giant Suntech Power (STP) can restructure its debt and improve their operational efficiencies, the solar manufacturer announced preliminary results for Q4 2012 and full year results that are not going to win over new investors.

For Q4 2012, Suntech stated that shipments of photovoltaic products dropped by approximately 4 percent from Q3 2012. Considering that Q4 is usually the largest sales quarter for solar companies, a 4 percent drop from Q3 is extremely disturbing. Revenues for Q4 2012 were approximately $358 million, a decline of 8 percent from the previous quarter. Gross margin for Q4 was 0.4 percent.

Full-year revenues took an even bigger hit as the company booked approximately $1.625 billion, a 48 percent drop from the previous year. Gross margin for the year was negative 1.4 percent.

Whether or not today’s numbers will fuel the Warren Buffet takeover rumors remains to be seen, but it’s fairly obvious that the declining revenues and disappearing gross margin will not attract many new investors to this troubled stock.

And with revenue disappointment came the additional setback that Suntech is delaying its full-year 2012 results.

Suntech’s American Depository Receipts, worth an ordinary share, were off 4 percent in morning trading.

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