UPDATE 4-Solar star Q-Cells warns on sales, sector shares hit
* Q2 sales 142 million eur vs 225 million in Q1
* Q2 EBIT loss 62 million eur; says market still difficult
* Sees tough H2, pricing pressure to continue -CFO
* Shares down 13 percent, other solar stocks fall
* H2 recovery in doubt (Rewrites, adds CEO comments, First Solar share indication)
FRANKFURT, July 14 (Reuters) - Q-Cells SE (QCEG.DE), the world's biggest maker of solar cells, dropped its full-year sales outlook after prices fell sharply in the second quarter, denting hopes of a recovery and sending shares across the sector lower.
Solar cell makers have been hit by a steep decline in prices for cells, mainly caused by an oversupply that built up during the boom years of 2007 and 2008.
Q-Cells Chief Executive Anton Milner told analysts on Tuesday that the second-quarter price fall was much worse than the company had expected. "Prices accelerated down in the second quarter," he said.
Earlier this month, Q-Cells said it was not planning to issue a profit warning, denying market talk that had driven its shares down. In May, the company slashed its 2009 sales outlook for the third time in six months.
Shares in solar stocks in Europe and the U.S fell after the news, with Q-Cells leading the pack, down 13.2 percent, while German peers SolarWorld (SWVG.DE), Solon (SOOG.DE), and Phoenix Solar (PS4G.DE) were all down 2.3 to 3.2 percent.
U.S.-listed First Solar (FSLR.O), Suntech (STP.N) and SunPower (SPWRA.O) also dropped between 1.7 to 3.2 percent.
Shares in Norwegian peer REC (REC.OL) fell up to 3 percent before gaining 0.8 percent, after it said a recent rights issue was 60 percent oversubscribed, while London-listed PV Crystalox (PVCS.L) was 4.1 percent lower.
"(The case of) Q-Cells is more problematic since it suggests the company has problems with the Asian competition that can produce at much lower prices," said Philippe de Weck, fund manager at Pictet, who is managing the company's Clean Energy fund.
Q-Cells's Japanese competitors Sharp Corp (6753.T) and Kyocera (6971.T), were down 0.3 percent and up 0.5 percent respectively in Frankfurt trade SHRP.F (KYO.F), albeit at very low trading volumes.
Q-Cells said on Tuesday it no longer expects sales to reach 1.3 billion to 1.6 billion euros, adding that it is was not possible to make a reliable forecast. Continued...
