By Nichola Groom and Matt Daily
LOS ANGELES/NEW YORK (Reuters) - U.S. solar company SunPower Corp reported an unexpected quarterly net loss and slashed its outlook for 2009 as a global credit crisis has choked demand for solar panels, sending shares down more than 7 percent in extended trade.
MEMC Electronic Materials Inc, which makes silicon for the solar and semiconductor industries, posted a slight profit for the quarter as sales slid 57 percent. It's stock fell 2 percent after hours.
The solar industry was virtually unscathed by the economic downturn until late last year, when funding for all types of projects dried up, green ones included.
A lack of financing for solar projects combined with a pullback in solar tax breaks in Spain have led to a flood of solar panels in the market, driving prices down and hurting producers' profits.
Excess supplies of polysilicon following an industrywide scramble to add capacity for the burgeoning solar industry have also sent those prices tumbling to around $100 a kilogram after soaring to $500 a kg last year.
Prices on both solar panels and polysilicon are expected to continue their slide, SunPower and MEMC said, though one analyst said sales volumes may have bottomed.
"People were almost in shock in the first quarter in almost every market that you can think of because financing dried up very very quickly," said Jefferies & Co analyst Paul Clegg. "There is a sense that we are digging our way out of that ... but we still have a ways to climb up in terms of being able to finance new projects."
Clegg has "buy" ratings on SunPower and MEMC.
PRICES CONTINUE TO SLIDE
SunPower said it was prepared for a further 20 percent drop in panel prices after they fell less than 10 percent in the first quarter. But the company said it expects second-quarter sales to be 20 percent higher than first-quarter levels.
Chief Executive Tom Werner also said SunPower's solar panels, because they are more efficient than rival panels, continue to command a pricing premium despite the weak market.
In response to the weak market, SunPower said it would slash its capital spending budget by $100 million this year in part by putting off expansion of a Malaysian manufacturing plant until 2010.
MEMC, which is based in St. Peters, Missouri, said demand began to show some signs of improvement in the early part of the second quarter although prices for polysilicon wafers remain far below recent levels.
The company also said it had begun reducing staff levels because of weak semiconductor demand and expected to save $30 million a year once those cuts were completed.
SunPower's first-quarter net loss was $2.5 million, or 6 cents per share, compared with a net profit of $14.7 million, or 15 cents per share, a year ago. [nN23361940]
Revenue fell 22 percent to $214 million, lagging analysts' average estimate of $257.7 million.
"The first quarter of 2009 was the most challenging quarter we've seen since SunPower went public in 2005," Werner said in a statement.
The company forecast 2009 net income of 25 cents to 75 cents a share, including 20 cents a share in non-cash charges related to an accounting change. Analysts were expecting net income of $1.05 per share, according to Reuters Estimates.
Revenue is expected to be between $1.3 billion and $1.7 billion, SunPower said, below its previous forecast of $1.6 billion to $2 billion.
MEMC's first-quarter net profit was $2 million, or 1 cent per share, compared with a net loss of $41.8 million, or 18 cents per share, a year ago. [nN23364322]
Net sales fell 57 percent to $214 million from a year ago.
SunPower shares have fallen about 30 percent so far this year. The stock, which had closed 5 percent lower at $25.93 on Nasdaq ahead of the results, was down 6.7 percent in extended trade at $24.20.
MEMC shares, meanwhile, are down 23 percent since the company slashed its gross margin forecast on April 9. The stock fell to $14.40 in after hours trade after closing at $14.68 on the New York Stock Exchange.
(Editing by Tim Dobbyn, Leslie Gevirtz and Steve Orlofsky)
