SMA revises 2011 forecasts down; announces lay offs

Due to "subdued" market demand and the ongoing "weak" commercial order situation, SMA says that it expects to reap sales of between €1.5 billion and €1.7 billion, as opposed to the previously forecast €1.5 billion and €1.9 billion.
The company has also significantly reduced its EBIT expectations, from a range of €315 million to €475 million, to between €220 million to €300 million.
In an industry note issued, analysts at Jefferies state, "The guidance cuts come on the back of SMA’s meeting with its major clients over the weekend, and is a clear indicator that demand for solar is not picking up."
As a consequence of the reduced business activity, SMA says that it will have to lay off around 1,000 temporary employees by the end of the year.
Looking ahead to 2012, the company predicts either "stagnated" or "moderate" growth.
In a statement issued, the company said, "The subdued demand and weak commercial order situation can be explained by a number of factors.
"The debate surrounding the expansion of photovoltaic energy has unsettled end-customers just as much as the current euro and debt crisis. Pleasing development in the project business is testament to the current favorable general conditions for the expansion of photovoltaic energy.
"Investors are currently benefiting from historically low interest rates and a significant reduction in the specific costs of constructing a large-scale solar power plant."