MEMC Warning (WFR)
MEMC Electronic Materials (NYSE: WFR) is seeing shares spanked this morning. The company has issued downward guidance with Q1 revenues of about $500 million. The problem is that previous guidance was $560 million and First Call was at $559.2 million. It also sees Q1 gross margins of approx 52%, compared to prior guidance of about 54.8%.
The company experienced an accelerated buildup of chemical deposits inside the new expansion unit at its Pasadena, Texas facility on multiple occasions, and each instance required several days of downtime for maintenance to clean and re-stabilize the unit. The utilization of the Pasadena facility was about 20% lower than Q4 and resulted in much lower than anticipated output.
Despite a softening economy and despite it being a materials supplier for semiconductors, this has become such a go-to supplier stock for solar cells materials that this much downside isn’t accepted by traders.
Shares closed at $76.39 yesterday, and they are trading down 10% in pre-market trading at $68.75 pre-market. Its 52-week trading range is $49.70 to $96.08.
Jon C. Ogg
April 3, 2008