* Cuts full-year shipment outlook
* Shares fall as much as 25 pct
(Adds executive and analyst comments)
Nov 7 (Reuters) - Solar panel maker China Sunergy Co Ltd said shipments fell in the third quarter compared with the second quarter due to tight credit in China that hurt its ability to buy raw materials.
The company's shares fell as much as 25 percent on Thursday morning on the Nasdaq.
The Chinese government has propped up loss-making solar companies with generous state subsidies and loans, but is now trying to cut excess capacity and encourage consolidation in the fragmented industry.
China Sunergy has been in discussions with domestic commercial banks to secure additional lines of credit, a company executive said on a post-earnings conference call.
He said the credit environment in China had started easing.
The company, which has not made a profit in the past 10 quarters, said its solar product shipments fell to about 110 megawatts (MW) in the third quarter ended Sept. 30 from 126.4 MW in the second quarter.
The company also cut its full-year shipment forecast to 440-480 MW from 500-550 MW.
Third-quarter gross margin is estimated to be in low single digit in percentage terms compared with 9.3 percent in the second quarter ended June 30.
Shipments to Europe declined in the third quarter, another company executive said on the call, adding that China Sunergy was ramping up production at its plant in Istanbul, Turkey.
The company is banking on the plant to reduce the impact of anti-dumping duties imposed by the European Union on China-made solar products.
Like peers, China Sunergy is shifting its focus to China, Japan, India and the United States to reduce its dependence on Europe.
The company's shares have nearly doubled in the month to Wednesday close amid a broader rally in solar stocks, fueled partly by growing demand for solar energy in new markets.
"The recent run up in the share price appears unjustified by results and guidance," Cowen and Co analysts said in a note.
However, China Sunergy reported a smaller second-quarter net loss as costs fell sharply.
The company's net loss narrowed to $1.4 million, or 11 cents per American depositary share (ADS), in the second quarter from $30.3 million, or $2.26 per ADS, a year earlier.
Cost of goods sold fell 41 percent.
Revenue dropped 33 percent to $71.8 million.
China Sunergy shares were down 17 percent at $7.88 on the Nasdaq.
(Reporting by Swetha Gopinath in Bangalore; Editing by Maju Samuel and Kirti Pandey)