Solar

MEMC tips 4Q11 results, quells Japan project rumors

MEMC is out with two new press releases, one responding to reported major solar project investments in Japan (through its SunEdison business), and the other at teaser at its upcoming 4Q11 results that appear to be better than expected.

January 18, 2012 – MEMC is out with two new press releases, one responding to reported major solar project investments in Japan (through its SunEdison business), and the other at teaser at its upcoming 4Q11 results that appear to be better than expected.

First, the 4Q numbers. A month ago MEMC laid out a major revamp including capacity reductions, plant idlings, and a 20% global workforce shedding. Even before calculating the anticipated dent to its 4Q11 books, MEMC thought 4Q11 sales would be down by as much as -40% (to $523M-$585M vs. original expectations of $700M-$1B). and EPS would plunge through the floor (-$5.20 to -$6.38, vs. flat to $0.20).

So now it’s something of good news that MEMC is updating its 4Q11 outlook (official numbers will be released on Feb. 15) with some upside: sales of $698M-$733M, though the company didn’t clarify just where the extra $150M came from. EPS, now including the big chomp from December’s restructuring plus some “largely noncash adverse tax effects associated with world-wide income distribution,” is only “slightly” worse, at ($5.20) to ($6.50). All told the restructuring charges and tax impact, plus goodwill impairment, appear to have slammed MEMC for $1.2B-$1.5B during the quarter.

Hammer out those dents, though, and MEMC still reports a net loss of $75M-$88M. The company noted that its numbers were lower “primarily due to solar energy project timing,” with interconnects exceeding 100MW in 4Q11 but still falling “short of our expectations.”

Speaking of projects, MEMC is going out of its way to quell reports that it’s planning major solar power investments in Japan through its SunEdison unit — even though those reports cite a SunEdison spokesperson as the source. Bloomberg and the local Nikkei [subscription required] cite negotiations to invest ¥350B (US $4.6B) over five years to build solar power plants in Niigata and Fukuoka prefectures “through an Osaka-based tie-up partner” and soliciting Japanese investors. The Nikkei says SunEdison would look at 1MW plants, adding up to 1GW of output over the five-year period.

However, MEMC’s official position, stated in a newly issued PR, is that while it is very much interested in the Japanese market, no plans are set at this time because of what it calls “uncertain project economics.” Japan is implementing legislation that mandates utilities to procure power from renewable energy sources, but the actual FiT rates haven’t been spelled out. And without a FiT rate, the project pricing and costs can’t be teased out. “The size of SunEdison’s future investment in solar project development in Japan, if any, has not yet been determined,” says the company in a statement. And, perhaps with an askew glance at the local SunEdison rep, it adds this: “As the company’s plans in this market evolve, appropriate public announcements will be made to keep investors informed.”