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By Purwa Naveen Raman
BANGALORE, July 23 (Reuters) - MEMC Electronic Materials Inc WFR.N posted lower-than-expected quarterly profit as it was hurt by disruptions at two of its facilities, and also cut its 2008 outlook, knocking its shares down 29 percent after the bell.
The company, which supplies silicon wafers to the chip and solar industries, also gave a weak third-quarter revenue outlook, citing uncertainty in demand for its semiconductor application, mainly due to a weak economy.
Second-quarter net income was $176.1 million, or 76 cents a share, from $163.6 million, or 70 cents per share, a year earlier. Excluding items, it earned 92 cents a share.
Revenue rose 12.4 percent to $531.4 million.
Analysts on average expected earnings of $1.01 a share, excluding items, on revenue of $557 million, according to Reuters Estimates.
The company said it suffered a “premature failure of a relatively new heat exchanger” at its Merano, Italy facility, while a loose pipe fitting caused a fire at its Pasadena, Texas facility during the quarter.
This was the third or fourth manufacturing issue in a row over the course of probably last 12 months, American Technology Research analyst John Hardy said by phone.
“People were expecting the manufacturing hiccups to somewhat iron-out this quarter. But the way it turned out was that there were actually more issues,” said Hardy, who has a “buy” rating on the stock.
“People are afraid that one issue begets another and it may take a while to iron-out.”
MEMC, whose customers include South Korea’s Samsung (005930.KS) and China’s Yingli Green Energy YGE.N, sees sales of $560 million to $620 million for the third quarter. Analysts were expecting revenue of $620.0 million.
MEMC lowered its profit view for 2008 to a range of $4 to $4.30 a share, from its prior view of $4.50 to $4.60 a share, both excluding items.
It sees revenue of $2.25 billion to $2.35 billion for the period, down from its previous forecast of $2.4 billion to $2.5 billion.
Analysts were expecting the St. Peters, Missouri-based company to earn $4.24 a share, excluding items, on revenue of $2.36 billion.
Shares of MEMC, which competes with Japan’s Sumco Corp (3436.T) and Shin-Etsu Handotai, fell to $38 in after-hours trading. They closed at $53.80 Wednesday on the New York Stock Exchange. (Editing by Himani Sarkar)