GT Advanced Technologies Inc., a U.S. maker of solar manufacturing equipment with more than a year of backlogged sales, fell the most in a year after cutting its revenue and earnings forecast,
GT Advanced fell 10 percent to $8.00 in New York, the Merrimack, New Hampshire-based company’s biggest decline since Nov. 17, 2010.
A global surplus of production capacity and slowing demand growth for solar projects, prompted at least four panel makers to lower their forecasts in the past week.
GT Advanced also makes equipment to produce components for energy-efficient lighting and may be less exposed to the problems in the solar industry, said Theodore O’Neill, an analyst at Wunderlich Securities Inc.
“They have a $2 billion backlog, or about a year in revenue,” he said today in an interview. “If you start peeling the onion, there a lot of nice things about this stock.”
Ten of the 14 analysts covering the company, or about 73 percent, have “buy” ratings, according to data compiled by Blomberg. That’s the highest percentage among the 17 members of the Bloomberg Industries’ Large Solar Energy Index.
GT Advanced said revenue for fiscal 2012 will be $950 million to $1.05 billion, in a slide presentation to analysts today. That’s lower than its Aug. 24 forecast of as much as $1.1 billion. Earnings per share on a fully diluted basis may be from $1.45 to $1.65, down from a previous estimate of $1.50 to $1.80.
Sapphire Furnaces
GT Advanced makes equipment to produce polysilicon, the raw material in solar cells, and furnaces to grow synthetic sapphires, which are used in light-emitting diodes. Of the company’s backlog, $955 million is in its sapphire production equipment business.
The company expects demand for sapphire wafers to increase as governments, most recently China, phase out incandescent light bulbs.
"We have a very different business model than other alternative energy companies,” GT Advanced President and Chief Executive Officer Tom Gutierrez, said today during a conference call with analysts. “We have a diversified model with multiple revenue streams from businesses that serve the solar, LED and industrial markets.”
Some customers may delay receipt of ordered equipment into fiscal 2013, he said, leading to slightly lower sales in the current year. Because of the backlog, "We believe our polysilicon revenue in fiscal ’12, ’13 and ’14 is very secure,” he said. The company maintained its gross margin forecast at 43 percent to 45 percent.
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