Solar companies are painting a mixed picture of the sector’s health this month, with some companies surprising with strong results for the latest three-month period, and others disappointing. In the latter camp is Evergreen Solar, which on Thursday posted a loss in the December quarter on weaker-than-expected revenue, prompting its stock to tumble as much as 11 percent in after-hours trading to $1.97.
Evergreen said it swung to a loss of $52.1 million in the quarter, or 32 cents a share. A year earlier, it posted a profit of $788,000, or a penny a share. The loss included $23 million in charges related to the closure of a pilot plant, an $8 million writedown of equipment and $9.7 million in facility startup costs. The company had previously said it was closing a pilot plant in Marlboro, Mass., as it increased production at a new facility in Devens, Mass.
Revenue in the quarter doubled to $44 million, but came in shy of the $46.6 million that analysts had been expecting. On the positive side, Evergreen said it had $178 million in cash and short-term investments, up from $99 million a year earlier.
Gross profit was equal to 4.6 percent of revenue, down from 5.7 percent in the previous quarter and 28.1 percent in the same quarter a year earlier. The company said lower prices and higher costs related to the Devens facility accounted for the thinner margins.
On Tuesday, GT Solar, which makes manufacturing equipment that it sells to solar companies, said revenue in its quarter ended Dec. 27, 2008, rose 46 percent to $205.2 million, well above the Street’s estimate of $194.6 million. The company reported a net profit of 30 cents a share, besting analysts’ average outlook of 24 cents a share and reversing course from the 3-cent-per share loss it posted a year earlier.
GT’s stock has surged 48 percent since its earnings, closing at $4.97 on Thursday. But the company is giving cautious guidance for the current quarter, estimating sales at a midpoint of $155 million and net profit at a midpoint of 19 cents a share. That’s significantly lower than analysts’ average forecast of $200 million in revenue and 24 cents a share in net profit. The stock is still well below the offering price of $16.50 of its IPO last summer.
Last week, Hoku posted earnings that discouraged investors, while SunPower impressed with strong earnings. All in all, the solar industry seems to be muddling along in a tough economy. But instead of the wild swings in price that solar stocks saw in 2007 and 2008, investors are starting to look at each company’s individual health. While that may hurt certain stocks in the short term, if the sector is driven less by speculation and more by financials, it would be a big step forward for the whole sector over the long term.