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Energy Conversion's Extreme Makeover

Here’s a heartening development for anyone weary of the volatility in the solar sector: Energy Conversion Devices’ costly and painful turnaround is showing signs of working.

Analyst reports out today show a growing sense of cautious optimism about the company’s prospects this year following the release of its most recent three-month results. Sure, Energy Conversion (ENER) posted another in a long series of losses. Yes, the loss — at 14 cents a share — was more than double the year-ago figure and it was bigger than the Street’s consensus per-share loss estimate of 13 cents.

But the stock market has had its eye on Energy Conversion’s outlook for coming quarters, hoping for a move into the black by this summer. And that is what CEO Mark Morelli seems to be delivering.

According to Morelli, production of thin-film solar laminates is up 50 percent from last quarter and is three times the year-ago level. The company has also signed new agreements to sell 21 megawatts of laminates to Enfinity Management in Europe and 17 megawatts to SunEdison in North America.

Energy Conversion’s losses have mounted as it’s shed non-core businesses and ramped up production in its solar power operations. Now Morelli says the company can expect “sustainable profitability.” Cowen liked that, and subsequently upgraded Energy Conversion’s shares to Outperform from Perform, while Oppenheimer said it believed the turnaround story is real.

Shares of Energy Conversion have been volatile, even for solar stocks, falling to $22 in October, then rocketing to $36 last month before sliding to $20 two weeks ago. The stock closed today at $25.79, down 3 percent on the day but up 8 percent since the earnings report. That tug-of-war is likely to continue for a while, but for now, at least, there are some comforting signs for the bulls.

One Response to “Energy Conversion's Extreme Makeover”

  1. Green energy is definitely the best solution in most cases. Technology like solar energy, wind power, fuel cells, zaps electric vehicles, EV hybrids, etc have come so far recently. Green energy even costs way less than oil and gas in many cases.