10 November 2011

GT lowers guidance after drop in orders

For its fiscal second-quarter 2012 (which ended 1 October 2011), GT Advanced Technologies Inc of Merrimack, NH, USA (a provider of polysilicon production technology as well as sapphire and silicon crystalline growth systems and materials for the solar, LED and other specialty markets) has reported revenue of $217.7m, down 5.8% on $231.1m last quarter and 5% on $229.3m a year ago. Revenue by business segment was $98m in polysilicon (up from $23.9m last quarter), $111.2m in photovoltaics (down from $198.6m), and $8.5m in sapphire, all of which was sapphire materials revenue (roughly level with $8.6m).

Although still up on 40.6% a year ago, gross margin has fallen from 49.1% last quarter to 43.7%. Net income was $36.9m, down from $52.1m last quarter and $42.8m a year ago.

During the quarter, cash reserves rose from $473.4m to $494m (despite the use of $61m of cash for the acquisition in August of Confluence Solar Inc, which has developed continuously fed Czochralski growth technology).

“We are pleased to report solid financial performance in the second quarter with revenue and earnings above our guidance and gross margin expansion over the prior year,” says president & CEO Tom Gutierrez. “We continued to generate strong cash flow from operations and strengthened our balance sheet, while continuing our investments to extend GT’s technology leadership in the polysilicon, PV and sapphire businesses,” he adds.

New orders totalled $65.4m ($51m in polysilicon, $3.4m in PV and $11m in sapphire, down from $464.7m, $95.2m and $776.8m last quarter, respectively). Also, $27m of adjustments to backlog yielded net orders of $38.4m. Order backlog has hence fallen from $2.3bn to $2.1bn ($918.6m polysilicon, $247.2m PV, $955m sapphire), including $460.8m of deferred revenue.

“Business activity in our polysilicon segment was robust in the second quarter with bookings by OCI, one of the top polysilicon producers in the world, as well as an engineering services contract with an incumbent polysilicon producer,” continues Gutierrez. “In our sapphire business there were successful ASF start-ups at Saifei and HTOT. In addition, we completed a blind study with a third-party wafer manufacturer that demonstrated the sapphire produced by our ASF system is of the highest quality in the industry,” he adds.

“On the PV side of the business, the industry downturn is more severe than most expected and, as a result, we now expect to see additional push outs of PV deliveries into fiscal-year 2013,” Gutierrez concludes. “Although we believe our sapphire and polysilicon equipment revenues will strengthen this fiscal year and that we will maintain our leading PV market share, we are adjusting our guidance range to reflect conditions in the PV industry.”

After raising its original full-year fiscal 2012 revenue guidance from $850m–1bn in late May, GT has now lowered its guidance from $1.0-1.1bn to $950m-1.05bn (up 10% on fiscal 2011’s $899m). However, the firm has maintained its gross margin guidance of 43-45% (after raising it in August from 42-44%).

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