Shares of MEMC Electronic Materials Inc., the second-largest U.S. polysilicon maker, fell the most in nine months Wednesday after the company forecast a decline in solar project development this quarter.
MEMC, which also announced plans to change its name to SunEdison Inc. and invest in more solar projects that use its material, dropped 13 percent to $4.70 at the close in New York, the biggest decline since May 17.
The company sees sales of 10 megawatts to 38 megawatts of solar projects in the first quarter, down from 52 megawatts in the prior quarter. Total sales for 2013 will be 420 megawatts to 490 megawatts, a 28 percent increase from the 383 megawatts sold last year, the St. Peters, Missouri-based company said in a statement.
“The decision to hold projects on the balance sheet instead of selling them will be viewed negatively by some,” Jeffrey Osborne, an analyst at Stifel Nicolaus & Co. in New York, said in an e-mail. “It soaks up the use of cash with a long-term financial return as opposed to a quick flip of a project sale.”
MEMC makes polysilicon wafers that can be used in semiconductors and solar cells. The company bought SunEdison LLC, a solar project developer, in 2009. The proportion of revenues that came from solar projects and materials climbed to 68 percent last year, from 59 percent in 2010, the company said.
There may be $1 trillion in global solar project investment through 2020, Chief Executive Officer Ahmad Chatila said at the company’s investor meeting today. MEMC is targeting quarterly project sales of 150 megawatts to 200 megawatts in what he called “a hyper growth situation.”
The company said in a separate release today it plans to form SunEdison Capital, a unit to finance and invest in the solar power plants it’s developing. Carlos Domenech, an MEMC executive vice president, will be president of the new division, which will fund both internal and external solar projects and may acquire new solar developments.
On the semiconductor side, MEMC forecast a slower first half with an “industry recovery” in the second half boosting sales. Revenue for the unit will be $940 million to $990 million for 2013. The company reported $918 million in semiconductor sales last year.
Hemlock Semiconductor Corp. is the biggest U.S. polysilicon producer.
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