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MEMC sees sharply declining solar revenues

MEMC Electronic Materials Inc. has recorded "sharply" declining revenues in its solar business. For the full year, the company has declined to provide guidance. However, it expects system prices to drop to US$3.50 per Watt.

MEMC's Solar Energy segment performed poorly in Q1 2012, although the figures were an improvement on Q4 2011.

MEMC’s revenues declined both sequentially and year-on-year, due to weakness in the semi-conductor and solar markets. It attributes its sequential losses in the Solar Energy segment to lower projects sales and its annual declines to lower silicon wafer volumes and pricing.

"A major factor in weaker solar wafer volumes was the company's previously announced move away from external solar wafer sales. For the first quarter of 2012, SunEdison recognized non-GAAP revenue on 49 MW of solar energy systems sales, down 55 percent sequentially and down 11 percent year-over-year," said MEMC in a statement released.

Overall, MEMC recorded a GAAP revenue in the first quarter (Q1) of 2012 of $519.2 million (Non-GAAP: $523.8 million), down from $735.9 million in Q1 2011, and $717.8 million in Q4 2011. MEMC GAAP gross margin also declined, from 15.5 percent in Q1 2011, to 10.9 percent. It did increase, however, from the 8.2 percent achieved in Q4 2011.

A significant GAAP net loss of $92 million (non-GAAP: $59.4 million) was recorded in Q1 2012, compared to a loss of $4.5 million in Q1 2011. It did manage to pull up slightly from Q4 2011 though, which recorded an enormous loss of $1.5 billion. "Fourth quarter 2011 net loss included charges of $1,401.2 million due to restructuring, impairment and other charges," explained MEMC.

In terms of its Solar Energy business, a GAAP revenue of $303.2 million (non-GAAP: $307.8 million) was recorded, thus representing a 37 percent decrease from Q1 2011, and a 38 percent decrease from Q4 2011.

"The year-over-year decline was driven by significantly weaker solar wafer volume and pricing, partially offset by higher solar project sales. The sequential decline was driven by weaker solar wafer pricing and volume and lower solar project sales, partially offset by higher solar project average pricing," continued the company.

Segment GAAP operating loss, meanwhile, was $10.5 million (non-GAAP: $14.7 million), compared to an operating profit of $32.8 million in Q1 2011 and a loss of $1.2 billion in Q4 2011. 

At the end of Q1 2012, the Solar Energy business had a pipeline worth 2.9 gigawatts (GW), slightly down on its Q4 2011 pipeline of three GW.

MEMC says its restructuring plan, which included closing its polysilicon manufacturing plant in Italy, reducing capacity at its Oregon and Malaysia facilities, terminating supplier contracts and a reducing its global workforce are on track.