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.
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.