MEMC Lowers Guidance, Blames Lack of Credit (WFR)

December 18, 2008 by Douglas A. McIntyre

Burning_money_picCiting unavailability of credit to “some solar customers,” MEMC Electronic Materials, Inc. (NYSE:WFR) lowered its fourth quarter 2008 revenue guidance from $500 million to $400-$425 million. The company also projects that gross margins will fall about 2 percentage points, from 48% to around 46%.

MEMC’s interim CEO didn’t just blame lower demand and a weak globaleconomy. He also said that MEMC is not sure that orders for the fourthquarter will actually be converted to purchases. Even worse, “somecustomers who have placed short-term orders for solar products” may beunable to meet MEMC’s purchase conditions.

MEMC’s share price is off nearly 84% from 52-week highs. The price is off more than 6% in early trading this morning.

Paul Ausick
December 18, 2008