China Sunergy (CSUN) Posts Q1 58% Earnings Increase

QualityStocks would like to highlight China Sunergy Co., Ltd. (NASDAQ: CSUN), a specialized manufacturer of solar cell and module products in China. China Sunergy manufactures solar cells from silicon wafers, which utilize crystalline silicon solar cell technology to convert sunlight directly into electricity through a process known as the photovoltaic effect, and assembles solar cells into solar modules. China Sunergy sells these solar products to Chinese and overseas module manufacturers, system integrators, and solar power systems for use in various markets.
In the company’s news yesterday,

China Sunergy announced its financial results for the first quarter ended March 31, 2011, reflecting the company’s decision to transition its business operations from primarily selling solar cells to selling solar modules to end users.

The company noted its acquisition of CEEG (Shanghai) Soar & Technology Co. Ltd (SST) and CEEG (Nanjing) Renewable Energy Co. Ltd. in November 2010, and said that because of these acquisitions, the first quarter of 2011 isn’t entirely comparable with the first quarter or fourth quarter of 2010.

Revenue for the first quarter was $165.7 million, a 58.9 percent increase compared to the first quarter of 2010, but a decrease of 2.3 percent over fourth quarter 2010 revenues.

Shipments in the first quarter totaled 98.0 MW, including 92.1 MW of solar modules, in line with the company’s previous guidance.

Gross profit was $17.8 million, an increase of 5.3 percent over the first quarter of 2010, but a decrease of 34.3 percent over the fourth quarter of 2010.

Gross margin was 10.7 percent, exceeding the company’s previous guidance of 9.0 percent-10.5 percent.

Net income for the first quarter of 2011 was $3.5 million, or $0.09 per basic and diluted share, compared to a net loss of $63 million, or $(0.53) per share, reported for the first quarter of 2010.

As of March 31, 2011, the company had cash and cash equivalents of $79.6 million.

Stephen Cai, CEO of China Sunergy, noted slumped demand in the solar industry, and said the company is focusing on long-term preparations to combat market conditions and competition.

“We take a long-term view of the industry. Although European demand was soft in the first quarter, there are many untapped and developing markets abroad, not to mention China’s eventual emergence as an end market,” Cai stated in the press release. “We are preparing for the long-term by increasing in-house cell and module capacities, advancing our efficient-cell technology, and reducing our costs. Despite current end demand softness and margin pressure faced by us and all our competitors, we are holding to our stated course of capacity expansion for high-efficiency, low-cost solar products.”

The company also offered second-quarter guidance, expecting second quarter shipments will be 120 MW-130 MW. The company expects its gross margin for the second quarter of 2011 to be between 7.5 percent and 8.5 percent, with an in-house margin of 12 percent-13 percent.

About QualityStocks

QualityStocks, based in Scottsdale, Arizona, is a free service that collects data from hundreds of Small-Cap and Micro-Cap online Investment Newsletters into one Daily Newsletter Report. QualityStocks is dedicated to assisting emerging public companies with their investor communication efforts and connecting subscribers with companies that have huge potential to succeed in the short and long-term future.

To sign up for “The QualityStocks Daily Newsletter” please visit www.QualityStocks.net

Please see disclaimer on QualityStocks website: http://Disclaimer.QualityStocks.net

Forward-Looking Statement:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.