GT Solar raises FY2010 revenue guidance: backlog declining

With one of the largest order backlogs amongst solar industry equipment suppliers GT Solar International reported fiscal third quarter revenue of  US$173.6 million, compared with US$104.2 million in the second fiscal quarter and US$205.2 million in the third quarter of fiscal year 2009. The company raised FY2010 guidance to the upper end of its previous range with revenue expectation of US$500 million to US$550 million.

However, the recently announced US$40 million order for DSS furnaces from GCL-Poly was cancelled-out by de-bookings of US$59 million. New bookings for the quarter stood at US$58.8 million, resulting in a significant reduction in its order backlog. The backlog now stands at US$857 million, with US$254 million in the PV segment and US$603 million in the polysilicon segment.

“We are pleased with our performance in the third-quarter,” said Tom Gutierrez, President and Chief Executive Officer. “We have seen an increase in business activity over the last four months from our key customers in Asia, indicating that their utilization rates are climbing and, as a result, the supply environment for low cost, high quality wafers is expected to tighten. We believe recent orders, including some from new customers, provide further evidence that GT Solar remains the technology leader in the market and that our systems continue to be the choice of leading PV manufacturers.”

However, concerns were raised by several financial analysts including Vishal Shah of Barclays Capital and Titus Menzies at Libertas Partners over challenging conditions in the polysilicon segment.

Both were concerned that as much of its poly-based customers were new entrants, these were mostly likely to be impacted by declining polysilicon prices and tight credit conditions, putting the backlog under risk.

Both analysts noted in reports to clients that longer-term visibility in this segment was a cause for concern.

GT Solar executives noted in the call that some of its key customers in the solar segment were adding capacity to meet demand and that the company had been able to offer a fast turn-around in bookings, especially for its DSS furnaces.