Solar panel maker Suntech Powersaid Thursday quarterly earnings nearly doubled, beating analysts' estimates and driving its shares up more than 10 percent.
Net revenue more than doubled to $386.7 million from $163 million. Gross margins in the company's core business rose 24.4 percent.
Excluding items such as stock-based compensation, Suntech said it earned 36 cents per share.
Analysts, most of whom included stock-based compensation in their calculations, had expected profit of 28 cents per share. Including stock-based compensation and excluding restructuring
and other expenses, Reuters Estimates said the company earned
32 cents per share.
Suntech posted a quarterly gross margin of 24 percent, versus German rival Q-Cells' third-quarter gross margin of 37 percent.
That difference was because, as a newer entrant to the sector, Suntech was paying higher prices for the silicon raw material used in solar cells to convert sunlight into electricity.
But Chief Executive Dr. Zhengrong Shi told Reuters in an interview those margins would rise in the coming years.
"We'll have more low-cost (silicon supply) contracts start from 2009. You'll see gross margins rise from then,'' he said.
Suntech said its photovoltaic cell production capacity rose to 420 megawatts at the end of the quarter after it opened a new 1 gigawatt facility in Wuxi, China.
"We already have purchase orders for 2008 delivery totaling over 450MW, and we expect that extremely strong demand for our PV (photovoltaic) products will continue, leading to firm
pricing in 2008,'' Shi said.
The company raised its full-year cell production capacity target to 540 megawatts from 480 megawatts. Due to strong demand, rising capacity and increased silicon supplies, it forecast year-end 2008 PV cell production would reach 1 gigawatt, two years ahead of schedule.
The previous target for next year was 600 megawatts.
Suntech expects revenue of $1.9 billion to $2.1 billion for full-year 2008.
Shares in Suntech were up $5.22 or 8.5 percent to $66.91 per share on the New York Stock Exchange, down from the earlier peak at $68.34. Those shares have rallied 98 percent so far