Power-One ships record PV inverters in 2Q’12: Demand in Germany and Italy strong

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Major PV inverter firm, Power-One produced better-than-expected second quarter results on the back of strong demand in core markets, Italy and Germany, before changes to feed-in tariffs take place. The company shipped a record 1.3GW worth of PV inverters, with its renewable energy business generating US$255 million in sales, or 79% of total revenues for the quarter. Management also cited market share gains based on preliminary figures from IMS Research that showed it had a 14% global share of PV inverter market during the quarter, up from 11% in the same period of 2011.

Overall, Power-One posted revenue of US$322 million, well above guidance range of US$240 million to US$260 million. Consolidated gross margin for the second quarter was 30%.

The company had a cash balance of US$259 million at the end of the second quarter, an increase of US$54 million since the beginning of the year.

On a geographical basis, Europe represented 91% of its renewable energy business revenue, with 50% of the total generated from sales from Italy and 26% from Germany.

The weak spot was North America, which contributed only 5% of sales due to previous ramp-up and supply chain issues limiting plant output. Power-One said that it could have shipped between US$10 million and $20 million more in revenue in the second quarter had the supply chain issues and manufacturing operations-related issues been resolved.

However, these issues would soon be corrected and the plant utilization and shipments would improve in the second half of the year, support ed by the rollout of its ‘Ultra’ product line. Management noted that it had two of these utility-scale central inverters in beta testing in North America.

Sales in Asia Pacific made up 4% of sales, hampered by limited sales force, according to management. However, management noted that PV markets were shifting away from Europe and would increasingly be dominated by North America and Asia, including Japan. The company said that it was undergoing qualification of its products in Japan and would most likely team with a domestic business to support sales growth in the near future.

With 7GW of PV inverter installations, Power-One said that it would be increasing its product servicing headcount by 25%.

Third quarter guidance

Management noted that it expected demand in Germany and Italy to moderate in the third quarter, resulting in revenue to be in the range of US$260 million to US$280 million. Having previously been successful in India, management also noted that India had a lot of capacity to absorb shipments at the tail end of last year, while financing large projects were raised as an issue at the present time. However, management expected better business conditions in India in the second half of the year.

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