The Suntech Shines: Fool by Numbers

Earlier today, solar energy company and Motley Fool Rule Breakers pick Suntech Power (NYSE: STP  ) released earnings for the first quarter ended March 31.

  • Up nicely in early trading, Suntech easily surpassed investor expectations by boosting revenue by more than 174%. (Estimates were for a 154% improvement.)
  • Blazing demand should continue: Management upped its 2007 projection for photovoltaic output from 250 megawatts to 325 megawatts.
  • Perhaps that's why, unlike its lower-ranked rivals Evergreen Solar (Nasdaq: ESLR  ) , SunPower (Nasdaq: SPWR  ) , and First Solar (Nasdaq: FSLR  ) , the 1,204 amateur and professional investors tracking Suntech in Motley Fool CAPS give the stock four out of five stars.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$246,696

$89,886

174.5%

Net Profit

$26,094

$19,319

35.1%

EPS

$0.16

$0.12

33.3%

Diluted Shares

164,088

156,221

5.0%

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

19.04%

30.10%

(11.06)

Operating Margin

10.87%

22.32%

(11.45)

Net Margin

10.58%

21.49%

(10.91)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$693,519

$345,661

100.6%

Accounts Rec.

$163,778

$5,374

2947.6%

Inventory

$190,783

$61,868

208.4%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$45,425

$8,516

433.4%

Total Debt

$835,162

$77,035

984.1%

The balance sheet reflects the company's health.

Cash Flow Checkup

No cash flow statement provided. (Whatever.)

Free cash flow is a Fool's best friend.

Related Foolishness:

Suntech Power is part of the market-beating Motley Fool Rule Breakers portfolio, which contains seven stocks that have more than doubled. Intrigued? Click here to test-drive the service for 30 days. There's no obligation to subscribe.

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Fool contributor Tim Beyers, who is ranked 6,458 out of more than 29,300 in CAPS, is a sucker for growth stocks and a regular contributor to David Gardner's Rule Breakers team. He didn't own shares in any of the companies mentioned in this article at the time of publication. Tim's portfolio holdings can be found at his Fool profile. His thoughts on Foolishness and investing may be found in his blog. The Motley Fool's disclosure policy always adds up.


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