Bloomberg News

SMA Falls Most in Five Weeks on Forecast: Frankfurt Mover

May 10, 2012

SMA Solar Technology AG (S92), Germany’s biggest solar company by market value, fell the most in five weeks in Frankfurt trading as its profit margin and sales guidance for the full year disappointed analysts.

The stock dropped 6 percent, the most since April 4, to 31.445 euros at 1:22 p.m. local time. SMA’s shares are down 28 percent this year.

The largest supplier of inverters maintained its full-year forecast for sales of 1.2 billion euros ($1.6 billion) to 1.5 billion euros and a profit margin of 5 to 10 percent, SMA said today in its earnings statement. Inverters convert electricity from photovoltaic panels for use in the grid.

“Analysts were betting on an increase in guidance after first-quarter results beat expectations,” Katharina Cholewa, an analyst for WestLB AG, said by phone. It doesn’t seem that beating guidance is a “top priority” for SMA, she said.

The company reported first-quarter revenue and earnings before interest and tax that beat analyst estimates as demand increased ahead of feed-in tariff cuts in Italy and Germany, the world’s biggest solar markets.

SMA is not raising its full-year forecast because it expects the effects from the tariff cuts in these two markets to take effect in the second half, Chief Executive Officer Pierre- Pascal Urbon said today in an interview.

The Niestetal-based company is focusing on cutting costs and expanding in markets including North America and Asia as demand in Europe is expected to drop in the medium term, he said.

SMA reiterated its March 29 forecast that global installations are likely to be 20 to 26 gigawatts this year compared with 23 gigawatts last year. It also maintained its proposal for a lower dividend.

To contact the reporters on this story: Marc Roca in London at mroca6@bloomberg.net; Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Randall Hackley at rhackley@bloomberg.net


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