MEMC Electronic Materials Swings To 3Q Profit, Suspends View

Date : 11/01/2010 @ 5:17PM
Source : Dow Jones News
Stock : Sunedison, Inc. (PN) (SUNEQ)
Quote : 0.0203  0.0012 (6.28%) @ 4:46PM

MEMC Electronic Materials Swings To 3Q Profit, Suspends View

MEMC Electronic (NYSE:WFR)
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MEMC Electronic Materials Inc. (WFR) swung to a third-quarter profit on strong sales and margin growth, but the company suspended its 2010 guidance, citing uncertainty about the timing of profit recognition from project sales involving its SunEdison solar business.

Shares sank 9.2%, to $11.50 in after-hours trading, as the chip-maker supplier's results also fell short of Wall Street's expectations. The stock was down 7% this year as of the close.

Despite the miss, President and Chief Executive Ahmad Chatila said the latest results extended the company's "recent trend of steady improvement."

MEMC, which makes silicon wafers for the solar and semiconductor industries, swung to the black in the second quarter--its first profit in a year--as sales grew on a rebound in demand for chips for electronic devices and soaring global demand for solar power.

The company gets about 55% of its revenue from chips, another third from solar wafers and the rest from SunEdison, its solar-project developer.

For the latest quarter, MEMC reported a profit of $17.6 million, or 8 cents a share, compared with a year-earlier loss of $64.6 million, or 29 cents a share. The latest quarter had 2 cents of charges.

Revenue jumped 62%, to $503.1 million, including $21.5 million from SunEdison, which MEMC acquired a year ago.

Analysts estimated earnings of 13 cents on revenue of $531.3 million, according to a poll by Thomson Reuters.

Gross margin surged to 16.9% from 6.6%.

The semiconductor-materials segment swung to a profit as revenue climbed 50% amid higher pricing. In the solar materials segment, earnings fell 43% on lower pricing and higher costs, though revenue jumped 63%.

-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;


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