MEMC's solar business offsets struggling wafer sales
(Reuters) - MEMC Electronic Materials Inc WFR.N said it expects to install more solar projects in the current quarter but forecast weak demand for semiconductor wafers, which are used in chips and solar cells.
The company's solar unit has fared better than its semiconductor business, which has been hit by overcapacity and falling prices in the past few quarters.
MEMC said it expects revenue at the semiconductor materials business to fall 4 to 11 percent in the fourth quarter from the third due to a slowdown in the electronics industry.
It expects to sell 90 MW to 120 MW solar systems in the fourth quarter, more than the 74 MW it sold in the previous quarter.
MEMC's upbeat forecast for its solar projects business comes days after U.S. solar companies First Solar Inc (FSLR.O) and SunPower Corp (SPWR.O) reported stronger-than-expected quarterly results on new projects.
"We are also beginning to see the benefits of a leaner organization which should better position us for increasingly challenging markets in the near-term," MEMC's Chief Executive Officer Ahmad Chatila said.
MEMC in December slashed more than 1,300 jobs, or a fifth of its workforce. Solar companies have taken the ax to costs in a bid to improve margins.
The company said solar wafer prices declined nearly 50 percent in the third quarter.
MEMC reported a quarterly profit on higher volumes at its semiconductor materials business. Total revenue, however, fell 17 percent, hurt by lower prices.
Net income was $37 million, or 16 cents per share, for the third quarter, compared with a loss of $94.4 million, or 41 cents per share, a year ago.
Adjusted profit was 30 cents per share.
Analysts had expected a loss of 12 cents per share, on revenue of $505.9 million, according to Thomson Reuters I/B/E/S.
MEMC shares, which have lost more than a third of their value this year, closed at $2.55 on Tuesday on the New York Stock Exchange. (Reporting by Swetha Gopinath in Bangalore; Editing by Saumyadeb Chakrabarty)
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