ST. PETERS, Missouri (AP) — MEMC Electronic Materials Inc. will eliminate about 20 percent of its work force and cut production, slashing costs as it deals with weak demand in the solar energy and chip markets. It also cut its outlook for the current quarter.
Shares gyrated, initially dropping to a 52-week low of $3.85 before recovering to rise 19 cents, or 4.4 percent, to $4.39 in morning trading.
The company, which makes silicon wafers for solar panels and semiconductor wafers, says it will cut about 1,300 jobs, including about 250 in the United States.
It's idling a polysilicon plant in Italy, reducing capacity at a facility in Oregon and limiting a production ramp-up at a plant in Malaysia.
The company is also consolidating its solar materials and SunEdison business units. SunEdison develops solar power projects.
MEMC said that it expects the moves, taken in the current quarter and the first three months of next year, will cut operating expenses by more than 15 percent. It's restructuring to "better align the business to current and expected market conditions," and increase cash flow. It expects the moves to boost cash flow by more than $200 million annually by the end of next year.
The company's taking a charge in the fourth quarter, which ends of about $700 million for the restructuring. It's also taking $425 million to $675 million in other charges related to its market capitalization and weaker outlook.
MEMC also cut its guidance, citing tough conditions in the semiconductor and solar markets. Some of its SunEdison project sales could be delayed into 2012 because of the weak economy in Europe.
It now expects adjusted results to come in between a loss of 5 cents to profit of 10 cents per share, on adjusted revenue of $789 million to $861 million. The projections exclude restructuring and impairment charges.
It had last month predicted adjusted fourth-quarter results of break-even to 20 cents per share profit on adjusted revenue of $800 million to $1.1 billion.
Analysts, on average, expect a fourth-quarter profit of 9 cents per share on $934.7 million in sales, according to a FactSet poll. Analysts' estimates usually exclude restructuring charges.
