GT Advanced forecasts loss on tight financing in solar, LED markets

Tue Dec 18, 2012 10:41am EST
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(Reuters) - GT Advanced Technologies Inc, a maker of solar and LED equipment, said it expects to report a loss for the fourth quarter as its customers struggle with limited access to new capital, sending its shares down as much as 17 percent.

GT Advanced forecast a loss of 5 cents to 10 cents per share for the quarter ended December 31, marking the company's first loss since 2008. Analysts had expected a profit of 14 cents per share, according to Thomson Reuters I/B/E/S.

GT Advanced's shares hit a low of $2.87 in early trading, their lowest in more than three years, valuing the company at about $400 million.

Asian banks are limiting their exposure to the solar and LED sectors and access to bank capital remains limited, Chief Executive Tom Gutierrez said on a conference call with analysts to discuss the company's outlook.

The limited liquidity and overcapacity in the solar industry will continue to affect customers, and GT Advanced's financial performance, through 2013 and potentially into 2014, he said.

The company, which gets about 95 percent of its revenue by supplying components to solar and LED customers in Asia, has already slashed its workforce by about 25 percent.

Apart from dealing with overcapacity, Chinese solar companies face U.S. import duties and the possibility of similar action in Europe, the biggest market for solar products.

Many have been able to keep operating largely due to generous handouts from the Chinese government.

"While there are plentiful examples of Chinese solar manufacturers being propped-up by local governments concerned about jobs, banks appear to be 'cutting the cord' on solar exposure," said Raymond James analyst Pavel Molchanov, who cut its rating on GT Advanced to "market perform" from "outperform".   Continued...