REFILE-UPDATE 3-Q-Cells gives cloudy outlook for solar market

(Deletes extraneous word “rise” in fourth bullet point)

* Says unable to predict prices, margins under pressure

* Posts bigger than expected 2009 net loss due to writedowns

* Says aims to be profitable this year

* Shares up 0.8 pct as investors cover short positions

(Adds analysts comments, shares)

By Christoph Steitz and Peter Dinkloh

FRANKFURT, Feb 23 (BestGrowthStock) – Q-Cells (QCEG.DE: ), the world’s
fourth-biggest maker of solar cells, echoed competitors in
warning on Tuesday of an uncertain year ahead as countries cut
financial support for solar power and low-cost producers
pressure prices.

While Q-Cells is sold out for the first half of the year it
sees “unclear pricing dynamics” from July onwards, it said,
adding that it could only say of 2010 that it aims to be
profitable as prices remain so unpredictable.

Germany, which last year accounted for half of the entire 18
billion euros ($24.5 billion) global market for photovoltaic
installations, will cut its crucial pricing incentives for solar
power from July, a parliamentary source said on Tuesday.

“It’s hard to give a concrete outlook (for 2010) given the
great uncertainty in the market,” Q-Cells’ chief executive,
Anton Milner, said in a conference call for reporters.

“We expect strong market growth in the future, but margins
will remain under pressure.”


Graphic on the increase in solar cell production:


Expensive solar power depends on state support so that it
can be sold on the power market, but countries throughout
Europe, including Italy and France, are cutting their support
regimes as the technology becomes more profitable and government
finances are strained. [ID:nLDE61B0BW]

Rival First Solar (FSLR.O: ), which overtook Q-Cells as the
world’s biggest maker of solar cells in 2009, last week
disappointed investors with its own outlook for 2010, pointing
to the uncertain Germany market. [ID:nN18198393].


Graphic on market share changes in 2008 vs 2009:


Q-Cells already took a hit in 2009 when writedowns and
plummeting component prices led to a larger than expected net
loss, the company said earlier on Tuesday.

The manufacturer wrote down investments in Sovello — a
joint venture with peers Evergreen Solar (ESLR.O: ) and Norway’s
Renewable Energy Corp (REC.OL: ) (REC) — as well as Sunfilm and
Solaria Corp. [ID:nLB153099], [ID:nL664956]

That led to a net loss last year of 1.356 billion euros
($1.85 billion), more than the average of forecasts given by
analysts in a Reuters poll, which predicted a net loss of 986
million euros.

Nonetheless, the Q-Cells share price was up 0.8 percent at
7.79 euros at 1100 GMT, dropping back from a day’s high of 8.1
euros which analysts attributed to some short covering.

“According to my information short positions in Q-Cells are
the ninth-largest of all short positions on European stocks,”
said Cheuvreux analyst Philippe Bumm.

The TecDAX (.TECDAXI: ) index of technology stocks traded in
Frankfurt slipped 1.2 percent and the FTSE cleantech index
(.FTET50: ) fell 0.6 percent.

Sector investors are now expected to turn their attention to
the performance of Chinese cell makers such as Suntech (STP.N: ),
the world’s second biggest manufacturer, and Yingli (YGE.N: ), the
fifth-biggest, which are expected to release fourth-quarter
results on March 4 and 8 respectively.

The renewable energy unit of Spanish utility Iberdrola
(IBE.MC: ), Iberdrola Renovables (IBR.MC: ), will report its 2009
results later on Tuesday.

Investing Basics

($1=0.7340 euros)
(Editing by Greg Mahlich)

REFILE-UPDATE 3-Q-Cells gives cloudy outlook for solar market