Q-Cells withdraws 2009 outlook

FRANKFURT (Reuters) - Q-Cells, the world's biggest maker of solar cells, on Monday withdrew its full-year sales outlook, expecting a substantial operating loss in the second quarter, as market environment remained dire.

"The prolonged weak development of the global photovoltaic markets has continued to negatively impact the business development of Q-Cells SE in the second quarter," the company said in a statement.

Q-Cells -- which in May slashed its 2009 sales outlook for the third time since September -- no longer expects sales to reach 1.3-1.6 billion euros ($1.81-2.23 billion) in 2009, adding it would not be possible to make a reliable forecast at this stage.

"In spite of an expected recovery in market volume in the second half of the year due to seasonal upturn, a generally tough market environment is still being expected," the company added.

Along with the industry, Q-Cells has been hit by a massive decline in prices for solar cells, mainly caused by an oversupply that has build up during the boom years of 2007 and 2008, while the funding-hungry sector has also been hit by the global credit squeeze, making the borrowing of money more difficult.

The company said second quarter sales came in at 142 million euros, compared with 580 million last year, while the loss before interest and tax reached 62 million euros, down from a profit of 119 million in the year-earlier period.

"We expect (the) share to open (significantly below 10 euros today. The second quarter result will also drag down other solar stocks," a local trader said.

In May, Q-Cells, which competes with Sharp Corp and Kyocera, raised about 780 million euros in cash by selling a 17.2 percent stake in Norwegian Renewable Energy Corp as well as issuing a convertible bond.

(Reporting by Christoph Steitz)