Dec. 18 (Bloomberg) — GT Advanced Technologies Inc., a
U.S. supplier of manufacturing equipment for solar and energy-
efficient lighting products, fell the most in more than six
weeks after forecasting 2013 earnings that will fall short of
expectations and market conditions that are unlikely to improve
for at least a year.
GT Advanced tumbled 11 percent to $3.07 at the close in New
York, the most since Oct. 31.
The company, based in Nashua, New Hampshire, anticipates
earnings of 25 cents to 45 cents a share next year on sales of
$500 million to $600 million, according to a statement today.
Analysts were expecting earnings of 82 cents a share next year,
the average of 11 estimates compiled by Bloomberg, and revenue
of $662 million.
The company’s customers in the solar industry are facing
slowing demand, plunging prices and a supply glut, which are
driving down sales of GT Advanced’s manufacturing systems.
Chinese buyers are receiving less support from their government
as “Beijing is ending its previous ‘blank check’ policy,’”
Pavel Molchanov, an analyst at Raymond James & Associates Inc.
in Houston, wrote in a note to investors today.
“The Chinese government, which has previously been very
supportive of providing capital for expansion to these
companies, has now taken its foot off the gas pedal,” Molchanov
said in a telephone interview. “That’s really what GT’s
management alluded to when they said there’s a liquidity freeze
for its customer base.”
Molchanov downgraded GT Advanced to the equivalent of hold.
Inventory Writedown
Sales in the current quarter will be $95 million to $102
million, and the company will take a charge of $80 million to
$90 million to write down “the majority” of its inventory of
its DSS product line of systems used to grow polysilicon, the
main ingredient in solar cells. GT Advanced is evaluating other
potential charges for declining asset value that may reduce
earnings for this quarter.
“We expect that the current situation of over-capacity,
price cost imbalance, and limited liquidity will continue to
impact our customers and our financial performance through 2013
and potentially, into 2014,” Chief Executive Officer Tom Gutierrez said today on a conference call with analysts.
“Current market conditions and access to capital in our
served markets are very unlikely to improve over the next 12
months, and uncertainties still remain as to when a turnaround
can be expected,” Gutierrez said.
To contact the reporter on this story:
Justin Doom in New York at
jdoom1@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg at
landberg@bloomberg.net
