* Sees Q4 charge of $700 mln
* In Q4, sees adj. loss of $0.05/shr-$0.10 EPS
* Cuts adj Q4 sales forecast to $789-$861 million
* Shares up 3 pct
By Swetha Gopinath and Krishna N Das
Dec 8 MEMC Electronic Materials Inc
slashed its outlook for the current quarter and said it
will cut jobs and reduce capacity as the silicon-wafer maker
grapples with lower demand.
The company will cut more than 1,300 jobs, or a fifth of its
workforce, and will be idling some of its facilities, as it
looks to lower costs amid a severe downturn in the renewable
MEMC, like its solar-wafer rivals LDK Solar and
Renesola, has seen a sharp decline in its margins and
sales as prices for renewable energy systems fell by 40 percent.
A number of solar companies have gone bankrupt and a host of
them have cut capacity.
MEMC will reduce capacity at its Portland, Oregon crystal
facility. It also plans to idle its polysilicon facility in
Merano, Italy and may close it unless "dramatic feedstock,
power, and other cost reductions are achieved in the near term."
"We expect capacity related actions in solar materials to
lower the average cost of our modules for our downstream solar
energy systems and provide greater manufacturing flexibility in
the future," Chief Financial Officer Mark Murphy said on a
conference call with analysts.
MEMC said about 250 of the positions to be eliminated are in
the United States. An estimated 41 percent are in its
semiconductor materials segment and 47 percent in the solar
The company expects to take a related charge of $700 million
in the fourth quarter.
"The company is chasing a moving target as Chinese companies
continue to add capacity and lower prices. The actions do
nothing to put the company out of the way of relentless downward
pressure on solar prices," Wunderlich Securities' analyst
Theodore O'Neil wrote in a note.
SUN SETS ON SOLAR WAFERS?
MEMC, whose main business supplies silicon wafers to the
solar and semiconductor industries, branched out into solar
project development through its acquisitions of SunEdison and
the U.S. arm of Fotowatio Renewable Ventures.
"They have almost completely exited the solar wafer
business. You could see them exiting it completely at some
point," Kaufman Bros' analyst Jeffrey Bencik said. "They'll
continue to focus on the SunEdison business and the
For the fourth quarter, MEMC expects an adjusted loss of 5
cents per share to a profit of 10 cents. It had earlier forecast
a breakeven or 20 cents per share.
Analysts, on average, were expecting a profit of 8 cents,
according to Thomson Reuters I/B/E/S.
The company lowered its adjusted sales forecast to $789-$861
million, from $800-$1.1 billion earlier. Analysts had expected
The company's shares, which had lost about two-thirds of
their value this year, rose 6 percent to $4.47 in early trade on
Thursday on the New York Stock Exchange.