Suntech Power Holdings Co. Ltd. (STP) announced preliminary financial results for first quarter 2010. The company anticipates total revenue for the quarter in the range of $580 to $590 million, well above the Zacks Consensus Estimate of $565 million.
 
Suntech’s better-than-expected revenue is driven by a vigorous demand in the quarter. With a robust demand in incumbent solar markets and a rapid growth in a host of emerging markets, the company expects this environment to continue throughout 2010.
 
Suntech revised its gross margin guidance for the quarter to the 19% to 20% range compared with the previous guidance of 18% to 20%. Additionally, the company expects to incur foreign exchange losses in the $24 to $25 million range and hedging gains of roughly $2 to $3 million in the first quarter.
 
With a view of mitigating foreign currency losses (due to the weaker euro) in future, the company has increased the hedge coverage of the net euro exposure to 50% for the second quarter and plans to take it further to above 60% in the second half of the year.
 
Based in Wuxi, China, Suntech Power Holdings is one of the world’s leading solar energy companies as measured by production output of crystalline silicon solar modules. The company designs, develops, manufactures and markets a variety of photovoltaic (PV) cells and modules, including a broad range of value-added building-integrated photovoltaics products. Suntech’s products are used in a variety of residential, commercial, industrial and public utility applications worldwide. The company also provides PV system integration services in China and the U.S., and is expanding into the development of utility scale solar power systems.
 
As of December 31, 2009, Suntech had an annualized aggregate PV cell and module manufacturing capacity of 1.1 gigawatts (GW). The company plans to expand this to 1.4 GW by the first half of fiscal 2010.
 
Suntech is scheduled to announce its financial results for first quarter 2010 on June 3, 2010.
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