Avian Securities Maintains a 'Negative' on Suntech Power (STP); Unimpressive Results

Avian Securities maintains a 'Negative' on Suntech Power (NYSE: STP).

Avian analyst, Mark Buchman, said, "We are maintaining our Negative rating on shares of Suntech Power following a set of unimpressive results and guidance. Q2 revenue easily surpassed the Consensus estimate, but EPS of ($0.19) missed badly as both gross and operating margin declining roughly 600 basis points sequentially while losses of ~$30mn were attributed to FX hedging activities. The forward looking guidance was mediocre as well despite shipment guidance of at least 15% sequential growth. ASP declines will likely outpace cost reduction efforts again in Q3 such that gross margin could decline by up to 400 basis points sequentially. Management is also expecting another $30mn loss from FX charges, so while operating margin is expected to be marginally positive, both interest and other expenses will drive earnings to another loss in Q3."

For more ratings news on Suntech Power click here and for the rating history of Suntech Power click here.

Shares of Suntech Power closed at $5.07 yesterday.

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