Why MEMC's Shares Skyrocketed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of MEMC Electronic Materials (NYSE: WFR  ) soared nearly 40% in early trading today after trouncing analyst expectations with a surprise adjusted profit of $0.14 per share. The stock's been meandering lower all morning, but still retained a 16% gain as of this writing.

So what: MEMC thoroughly thumped estimates on the top line, too. Analysts had expected $749.5 million in revenue and a $0.02 loss per share. MEMC's $933.4 million top line and its adjusted gains came in well ahead of those numbers. However, non-GAAP revenue figures had a boost from real estate and leaseback deals, and the company's bottom line saw a loss of $61.3 million, or $0.27 per share, under GAAP accounting measures.

Free cash flow levels were strong at $114 million for the quarter, and MEMC also sold 144 megawatts worth of solar projects, a substantial increase from the 23 megawatts booked during the year-ago quarter. Semiconductor sales made up 29% of the company's revenues and are expected to occupy a larger part of MEMC's sales mix during the second half.

Now what: Analyst estimates are still somewhat grim for the upcoming quarter. The average bottom-line estimates for the third quarter have shrunk from $0.12 in EPS to just $0.01 per share over the past three months. Considering the solar sector's headwinds and MEMC's significant unprofitability, it'll take more than one juiced quarter to prove that this company is truly back on the rebound.

Want more news and updates? Add MEMC to your watchlist now.

Fool contributor Alex Planes holds no financial position in any company mentioned here. Add him on Google+ or follow him on Twitter @TMFBiggles for more news and insights. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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