Q-Cells profit warning hits solar sector
FRANKFURT (Reuters) - Q-Cells, the world's largest solar cell maker, cut its outlook and said its markets would stay subdued well into 2009, hitting shares across the sector on fears the financial crisis would eat into demand for renewable energy.
Chief Executive Anton Milner said economic uncertainty had led since late November to "a flood" of requests from customers to postpone agreed deliveries until next year, and the company was planning a production shutdown over Christmas.
"We expect to witness a very negative reaction for the whole solar universe today as Q-Cells is seen as one of the bellwethers," Dexia analysts wrote in a note.
Shares in the company, which had hiked its outlook around a month ago, fell by as much as a third and the news weighed heavily on its peers in Europe, Asia and the U.S.
Experts see prices for solar cells and modules declining next year, placing a further burden on an industry that experienced a huge boom in 2007 but has recently suffered from the steep fall in oil prices, which has made investors think twice about funding in alternative energy projects.
An investment slowdown would have a major impact on growth projections. Current estimates for global production of solar panels for 2009 vary from 8 gigawatts to more than 20 gigawatts, up sharply from an expected 5 gigawatts in 2008.
Q-Cells on Tuesday trimmed its 2008 net income forecast by close to 15 percent and sales by almost 10 percent, and Milner said did not expect a recovery in the market until the second quarter of next year.
"The extent of the (guidance) cut was quite strong," said FrankfurtFinanz market analyst Heino Ruland. "If the market leader has such problems, the question is how others are doing."
PEER PRESSURE
Shares of Switzerland's Meyer Burger were down 4.2 percent, and Norway's Renewable Energy Corp (REC), one of the world's biggest producers of solar-grade silicon and wafers, down 9.5 percent.
German peers Solon and SolarWorld also lost ground. Module maker Solon, which had slashed its guidance last month, fell 2.76 percent and energy company SolarWorld shed 7.24 percent.
In early U.S. trade, First Solar dropped 5.4 percent and SunPower Corp plunged 4.1 percent.
U.S.-listed Chinese solar companies also declined. Suntech Power fell 12.4 percent, LDK Solar fell 4.8 percent, Trina Solar was down 6.4 percent.
The world's biggest module manufacturer, Suntech, said on Monday it expected the sector to produce an oversupply of solar panels in 2009.
Concern that future growth rates in the solar sector could fall short of expectations have also been highlighted by recent problems in the wind energy sector -- with German wind turbine maker REpower cutting its 2009/10 sales forecast last month. Continued...
