North Coast Solar Stocks

November 18, 2009

Solarfun Q3 profit beats, sees higher Q4 shipments

Filed under: CSIQ, CSUN, SOLF — Tags: , , , , — Jason @ 11:36 am

Wed Nov 18, 2009 11:36am EST

* Q3 income/ADS $0.37

* Q3 revenue $144.6 mln

* Sees higher Q4 shipments

* Shares up 8 percent

By Arup Roychoudhury

BANGALORE, Nov 18 (Reuters) – Chinese photovoltaic cell maker Solarfun Power Holdings Co Ltd (SOLF) reported a third-quarter profit that beat analysts estimates, helped by higher shipment volumes, sending its shares up 8 percent.

Solarfun also forecast fourth-quarter shipments of about 110 megawatts (MW), up 7 percent sequentially. It expects module processing services to account for about 20 percent of the total shipments.

“It was a good quarter, aided by really strong margins… going forward they are guiding towards a pretty strong fourth quarter and first quarter,” Simmons and Co International analyst Burt Chao said by phone.

On a conference call with analysts, company executives said they had good visibility on the key German market for the quarter and that shipments were supposed to rise there too.

Demand for photovoltaic solar modules that turn sunlight into electricity has taken a hit because of the global financial crisis and an oversupply of cells and modules.

Another worry for solar companies is when and by how much will the Germany government cut aid to its solar industry, the world’s top market for solar products.

Analyst Chao said a lot of how Solarfun’s German business grew depended on government policies there.

“Other than that I would think their outlook is pretty positive right now and that they are expanding to other markets in case the German market is to slow down,” he added.

Solarfun also said it expects average selling prices in the fourth quarter to fall 5 percent from the third-quarter rate of $2.03 per watt.

“For the first quarter of 2010, the company expects to see continuing good demand, with prices declining slightly from levels in the fourth quarter of 2009,” Solarfun said, adding that it remains on track to increase its module capacity by 700 MW next year.

Solar companies China Sunergy Co Ltd (CSUN) and Canadian Solar Inc (CSIQ) also had forecast an increase in shipments in the fourth quarter and 2010.

For the latest third quarter, Solarfun’s net income was $20.1 million, or 37 cents per American depository shares (ADS). Total net revenue fell 22.6 percent to $144.6 million.

Analysts on average were expecting Solarfun to earn 15 cents a share, on revenue of $145.1 million, according to Thomson Reuters I/B/E/S.

Photovoltaic module shipments reached 102.6 MW in the third quarter, compared with 41.8 MW a year earlier.

ADSs of the company rose 8 percent to $6.31 in late morning trade Wednesday on Nasdaq.

(Editing by Jarshad Kakkrakandy and Pradeep Kurup)

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