UPDATE 2-Suntech earnings beat forecasts, output to grow

(Adds details, CEO comments, byline; updates share rise)

By Matt Daily

NEW YORK, May 22 (Reuters) - Suntech Power Holdings Co Ltd (STP.N: Quote, Profile, Research, Stock Buzz) posted higher-than-expected quarterly earnings Thursday on robust demand for renewable energy sources, and said plans to raise its output of solar cells remain on track.

First-quarter net income was $55.8 million, or 33 cents per share, compared with $26.09 million, or 16 cents per share, a year earlier. Revenue rose 76 percent to $434.5 million.

Analysts were expecting earnings of 28 cents per share before special items, on revenue of $376.3 million, according to Reuters Estimates.

Suntech's production capacity of photovoltaic cells, which turn sunlight into electricity, jumped to 540 megawatts at the end of the quarter, up 50 percent from a year earlier, and is on track to reach 1 gigawatt by the end of the year.

One megawatt is enough power to supply about 850 homes.

Gross margin in the quarter widened to 22.2 percent from 19 percent a year earlier.

SILICON COSTS UP, RELIEF SEEN