Boston, MA 08/12/2014 (wallstreetpr) – Manufacturer of silicon wafers Sunedison Inc (NYSE:SUNE)’s higher operating costs would remain a concern despite the company posting profit for the second quarter. The divestiture of its semiconductor unit should allow it to focus more on its core businesses, Zacks equity analyst report said. However, it had not changed its rating on Sunedison shares.
Solar Energy Demand
Sunedison Inc (NYSE:SUNE) is predicted to gain from an increase in demand for its solar energy in the coming quarters. Though the higher operating expenses would remain a big thorn for Sunedison, its recent initiatives on cost cutting should help them to mitigate the concern and also expand margins.
Zacks equity research pointed out that more concerns for the company’s stock such as pricing pressures and extremely leveraged balance sheet. Though Sunedison would gain from the increasing demand for solar energy, competition from its rivals would prove to be a big headache and could remain a headwind. The focus on its core competencies should help the company to some extent since it had sold its semiconductor unit.
Rating Of Stock
Though there are some positives to be taken out from the second quarter financial results, the Zacks equity analyst reiterated its rating of Under perform on Sunedison shares due to some headwinds outweighing positives.
2Q Results
Sunedison Inc (NYSE:SUNE) suffered a net loss of $41.2 million or a loss of 16 cents a share for the second quarter, narrower than a net loss of $102.9 million or a loss of 45 cents a share in the prior year quarter. On a non-GAAP basis, it earned a profit of $33.7 million or 12 cents a share versus a loss of $42.4 million or a loss of 19 cents a share in the year-ago quarter.
While sales, on a GAAP basis, jumped to $646.2 million from $401.3 million, non-GAAP sales increased 13.4% to $557.5 million from $491.6 million in the previous year quarter. Though its gross margin slipped year-over-year, it had improved quarter-over-quarter.
