AmTech Previews MEMC Electronic (WFR) Q2 Earnings

July 23, 2008 12:24 PM EDT

American Technology Research is out with a research note previewing MEMC Electronic Materials (NYSE: WFR) Q2 earnings, which are expected out after the close today, with a corresponding conference call at 5:30 PM ET. The firm maintains a Buy rating on MEMC and has a $105 price target on the stock.

The firm's Q2 estimates are currently in-line with the Street estimates: AmTech sees revs of $2.36 billion and EPS of $4.30. AmTech notes that these estimates are slightly below MEMC's guidance of $2.4-$2.5 billion in sales and EPS in the range of $4.50-$4.60. Considering MEMC's guidance, the firm believes the company will reaffirms its outlook due to "strength in solar end markets and increasing capacity."

As MEMC's gross and operating margins were modestly depressed during Q1, AmTech expects the company to report gross margins up 280 basis points and operating margins up 370 basis points. Notably, the firm points out that "the poly market has yet to ease with the majority of incremental capacity being accounted for through long-term contracts."

Notably, AmTech believes shares of MEMC have limited downside from current levels as consensus estimates are below guidance.

MEMC Electronic Materials, Inc. designs, manufactures, and sells silicon wafers for the semiconductor industry worldwide.

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