Boston, MA 11/07/2013 (wallstreetpr) – On Nov. 6, the solar systems and semiconductor materials manufacturer Sunedison Inc (NYSE:SUNE) reported loss in its third quarter. This caused its stock price to plummet on the NYSE in the pre-market trading. Following the loss in the three months quarter ending Sept. the company has been forced to narrow its forecast for the next quarter.
Investors detest weak earning figures, much more narrowing of future focus. All these result in confidence loss. This situation compelled SUNE to report below estimates and cut guidance so that it forecasts on that which seems tenable. This is a conservative approach which companies use so that they don’t perpetually commit to higher goals. The question that investors should be asking is what next with SUNE? Is it a stock to hold or to jettison at the earliest opportunity?
Talking about the future of SUNE can better be capture by looking at its businesses. A look at the business of this solar and semiconductor materials company reveals that it has a lot of profitable projects underway and these have the potential to improve its top line in the next quarter. Most of these projects are in its solar system business segment. SUNE also has a backlog of similar projects which simply mean it has several revenue sources to exploit in the coming quarters. Its wafer business is also promising as semiconductor manufacturers seek to meet the demand for the microchips used in tablets, cars and mobile phones. So as long as people go for smartphones, cars and tablet computers, there will be business for SUNE to do.
In order to avoid reporting in red in the next quarter, SUNE has to get its costs to the minimum. Cost-cutting will help it offset the price weakness in the silicon wafer market and improve its bottom line in the end. And it seems that the company is already focusing on this strategy and this should get investors relaxed.
