UPDATE 3-Q-Cells sees subsidy cuts curbing profit growth

* Says sees 2011 sales of 1.3-1.5 bln eur, stable EBIT

* Thomson Reuters I/B/E/S estimate was for 1.42 bln eur

* Says Q1 business was very weak

* Shares fall 7 percent

(Recasts, adds analyst quote, details, shares)

FRANKFURT, March 29 (Reuters) – German solar company Q-Cells
SE (QCEG.DE: Quote, Profile, Research) cautioned subsidy cuts in Europe will curb profit
growth this year and signalled the likely impact on the sector
of Japan’s nuclear crisis can not be taken for granted.

Renewable stocks around the world have rocketed since a 9.0
earthquake in Japan triggered the worst nuclear crisis in 25
years and raised hopes that governments would speed up their
efforts of shifting towards clean energy sources.

Germany, which is also the world’s largest market for solar
products, has already switched off some of its nuclear plants
and the victory of renewables-friendly parties in Sunday’s
regional elections have delivered further upside.

But analysts have warned that any upswing in the renewable
sector is based on sentiment rather than on fundamental reasons,
as governments in Germany and Italy, the world’s top solar
markets, are set to cut support to the subsidy-dependent sector.
[ID:nN17197173] [ID:nLDE71N2KG] [ID:nLDE722105]

“The current situation in Japan has opened a discussion
regarding the future of nuclear power, which will have an impact
on the energy mix,” Q-Cells said in a statement, though it added
business in the first quarter had been “very weak”.

Q-Cell shares were down 7.04 percent at 3.156 euros at 0803
GMT, underperforming a 0.77 percent weaker German technology
index (.TECDAX: Quote, Profile, Research).

For a graphic on the top solar cell maker:


For an analysis on impact of Japan earthquake on renewables:


Q-Cells said it expected 2011 earnings before interest and
tax (EBIT) to be stable compared with the 82.3 million euros
($116 million) it posted in 2010.

Sales for the current year are seen in a range of 1.3
billion to 1.5 billion euros, after 1.35 billion generated last

“We believe that the very positive stock reaction after the
events in Japan and the elections has been too strong,” DZ Bank
analyst Sven Kuerten said, keeping a “sell” rating on Q-Cells.

According to Thomson Reuters I/B/E/S, the company is
expected to post 2011 sales of 1.42 billion euros, while EBIT is
seen at 81.3 million euros, down 1.2 percent from 2010.

Q-Cells trades at 14.2 times estimated 12-month forward
earnings, a discount to U.S. peer First Solar (FSLR.O: Quote, Profile, Research) but at a
premium to China’s Suntech Power Holding (STP.N: Quote, Profile, Research), Thomson
Reuters database StarMine shows.
(Reporting by Christoph Steitz; Editing by Louise Heavens and
Hans Peters)
($1=.7094 Euro)

UPDATE 3-Q-Cells sees subsidy cuts curbing profit growth