Power-One docks outlook on Eurozone austerity
Power products company Power-One slashed its third-quarter outlook Oct. 11, causing stocks to sink 3.8 percent in after-hours trading.
The Camarillo-based firm cut its outlook for third-quarter sales to the $240 million to $245 million range, down from its previous outlook of $265 million to $280 million. It said power conversion revenue was down about 10 percent from the previous quarter while renewable energy revenue “was modestly lower.”
Last year, Power-One showed signs of a strong turnaround, and its top executive told the Business Times the firm was focusing on the renewable energy market in Europe. The company opened three new factories and turned a $147.8 million annual profit, after losing $63.3 million in 2009. It also started to focus its business model on inverters for the solar and wind industries, particularly in Europe, where renewable energy receives large government subsidies.
“That allowed us to aggressively enter the European market,” CEO Rich Thompson told the Business Times in September 2010. “Germany, as a country, is the largest purchaser of solar equipment in the world.”
But Europe’s economic woes may be troubling Power-One now. Italy, which accounted for $365.8 million of Power-One’s $715.4 million in sales last year, has cut back drastically on its solar subsidies, causing demand there. to drop. Other European countries contributed $289.2 million to Power-One’s sales last year.
Power-One said that it will provide updated guidance for its full fiscal year when it reports its third-quarter earnings on Oct. 27. The company’s shares fell 19 cents to $4.85 on Oct. 11, after it updated its third-quarter guidance.[wikichart align=”center” ticker=”PWER” showannotations=”true” livequote=”true” rollingdate=”6 months” width=”390″ height=”245″]