Suntech Will Restate Results to 2010 After Alleged Fraud
Suntech Power Holdings Co. (STP), the world’s biggest solar-panel maker, reduced its forecast for shipments this year and plans to restate earnings back to 2010 following a fraud investigation over an investment in Italy.
Suntech said it has been a victim of fraud that will reduce its 2010 net income by $60 million to $80 million, according to a statement today. The Jiangsu, China-based company has concluded that a security interest it received in connection with financing solar projects in Italy “does not exist,” and the company plans to amend financial statements for 2010, 2011 and the first quarter of 2012 early next year.
Preliminary third-quarter sales were $387 million, down 56 percent from a year earlier and lower than the $466 million average of 13 analyst estimates compiled by Bloomberg. Suntech said panel shipments in the quarter fell 10 percent from the prior quarter, without giving the amount. The statement didn’t include net income or debt figures.
Suntech announced the fraud investigation in July and hasn’t released its second-quarter results. Preliminary sales for the second quarter, issued in August, were $471 million, and the company said shipments rose 33 percent from the first quarter.
Shipments this year will be 1.7 gigawatts to 1.8 gigawatts, down from an earlier forecast of 1.8 gigawatts to 2 gigawatts, Suntech said.
Suntech’s American depositary receipts, each worth one regular share, climbed 3.3 percent to 89 cents at the close in New York. They have declined 60 percent this year. The company is facing delisting from the New York Stock Exchange because the price is below the $1 minimum.
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