* Sees net loss for quarter due to one-time charges
* Margins to shrink, but revenues to top Wall St view
* Will shut down thin-film output
* Shares down 4.9 percent
(Rewrites; adds analyst comment, details, updates shares)
NEW YORK, Aug 6 China's Suntech Power Holdings
Co STP.N said charges to shut down its thin-film solar
production and from an investment would push it to a net loss
for the second quarter, knocking its shares lower.
The company, the largest Chinese photovoltaic solar panel
maker, also said its second-quarter revenues would rise to
between $620 million to $630 million, beating Wall Street
forecasts, but it expected its gross margins to soften.
Solar companies have seen sales surge this year on robust
demand in Europe, but weakness in the euro during the first
half and continued pressure to cut production costs have
weighed on their profits.
Suntech, which is in midst of sharply increasing its solar
panel production, said its gross margins would slip to between
17.5 percent and 18.5 percent in the quarter, down from 19.5
percent in the first quarter.
"Gross margin was a little lower that we thought. We were
expecting a kind of a price stabilization," said Adam Krop,
analyst with Ardour Capital Investments.
Including one-time charges, net loss for the quarter would
be between $147 million and $179 million, or 82 cents to $1.00
per American Depositary share. A year ago the company posted
net income of $10 million, or 6 cents per American Depositary
The company is due to report quarterly earnings on Aug.
Suntech will take a $50 million to $55 million charge to
shut down its thin-film amorphous silicon panel operation at
its plant in Shanghai, which it will convert to manufacture
crystalline silicon solar cells.
Amorphous silicon solar cells, which are typically used in
calculators, are cheaper to produce than crystalline silicon
cells, but are less efficient at turning sunlight into
The steep declines in polysilicon prices over the past 18
months has eroded amorphous silicon's price advantage, and also
prompted peer Applied Materials to shut down its thin film
production last month. [ID:nSGE66K0IJ]
Suntech will record another charge of $106 million to $126
million from its investment in ingot and wafer maker Shunda
Holdings Co, likely because of difficulty that company has had
ramping up production of polysilicon, Krop said.
Suntech acquired a minority stake in Shunda in 2008 for $99
million and signed a long-term wafer purchase agreement from
Shares of Suntech tumbled 4.9 percent to $9.55 on the New
York Stock Exchange, bringing its year-to-date decline to 43
(Reporting by Matt Daily, editing by Dave Zimmerman)