Being sold out through the first half of 2010 and with capacity expansions not taking effect until the third quarter, Suntech has narrowed its revenue projections for the first quarter to between US$580 million and US$590 and revised its gross margin forecast to the 19% to 20% range, compared to previous guidance of 18% to 20%. However, Suntech has been another victim of the foreign exchange issues between the dollar and the Euro and expects to incur a forex loss of approximately $24 million to $25 million for the first quarter.
Amy Zhang, Suntech’s CFO, said, “In order to help mitigate the pressure of a weaker Euro we have increased the hedging coverage of our net Euro exposure to 50% in the second quarter and plan to increase to above 60% in the second half of the year.”
“We are pleased to see extremely strong demand in the first quarter of 2010,” commented Zhengrong Shi, Suntech’s chairman/CEO. “With robust demand in incumbent solar markets and rapid growth in a host of emerging markets, we expect this environment to continue deep into 2010.”
Total net revenues for the fourth quarter of 2009 were US$583.6 million, an increase of 23.4% from US$473.1 million in the third quarter of 2009. The preliminary figures indicate only a slight increase over the previous quarter as the company remains capacity constrained.