24/7 Wall St. » SPWRA

ITC Keeps Investigating Chinese Solar Players (FSLR, SPWRA, TSL, JASO, LDK)

Administrator — Fri, 02 Dec 2011 18:06:32 +0000

Solar stocks can use all the help available, and news is out today that may help the ailing U.S.-based solar sector. The industry has complained of China’s solar firms dumping solar cheap panels and the U.S. International Trade Commission has just come out in favor of U.S. solar companies.

The ITC bulletin noted that it has “made affirmative determinations in its five-year (sunset) reviews concerning Crystalline Silicon Photovoltaic Cells and Modules from China. The USITC vote noted “Preliminary phase antidumping and countervailing duty investigations: Crystalline Silicon Photovoltaic Cells and Modules from China, Inv. Nos. 701-TA-481 and 731-TA-1190 (Preliminary)” today as the ITC sees threat or injury to U.S. solar firms from Chinese companies.

Seven US solar PV makers jointly filed the claim, but only the US unit of Germany’s SolarWorld was identified. Top US solar makers First Solar Inc. (NASDAQ: FSLR) and SunPower Corp. (NASDAQ: SPWRA) are not among the companies that signed on and no specific Chinese makers were identified in the complaint.

Leading makers like Trina Solar Ltd. (NYSE: TSL), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), and LDK Solar Inc. (NYSE: LDK) are surely among the targets. As far as LDK Solar is concerned, we have noted that this company is mathematically bankrupt without a guarantee from China.

Today’s news is not a registered victory as the outcome (and damage awards) are not yet known, but it is an indication that the U.S. solar players may get some margin stabilization ahead.

JON C. OGG

Filed under: ADR, Alternative Energy, China, Green Biz, Law, Regulation, Utilities Tagged: FSLR, JASO, LDK, SPWRA, TSL

Solar Prices Continue to Batter Industry (JKS, FSLR, TSL, JASO, STP, LDK, SPWRA, WFR, SRE)

Paul Ausick — Mon, 14 Nov 2011 14:36:17 +0000

China’s JinkoSolar Holding Co. Ltd. (NYSE: JKS) has from its beginnings been viewed as a low-cost provider of solar PV panels. Unfortunately, competition in the sector has brought every other solar maker down into that space and JinkoSolar is feeling the pinch. The 40% slide in solar panel prices so far this year does the company no favors, and it highlights the importance of the trade case brought against Chinese solar makers by Germany’s SolarWorld and six other US solar makers.JinkoSolar has revised its third quarter shipments and revenue estimates down sharply. The company lowered its estimate of shipments from 230-250 megawatts to 210-220 megawatts. Revenues have been sliced from $310-$330 million to $270-$280 million. A simple-minded calculation indicates that JinkoSolar is selling panels for about $1.27/watt. That number is probably too simple-minded — and too high. Solar industry research firm Solarbuzz reports mono-crystalline retail prices of $1.28/watt and $1.31/watt for multi-crystalline panels. Thin-film panels, such as those made by First Solar Inc. (NASDAQ: FSLR) are reported to be selling for $1.25/watt.

Falling prices have been punishing the industry, and other low-cost Chinese providers like Trina Solar Ltd. (NYSE: TSL), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), Suntech Powsr Holdings Co. Ltd. (NYSE: STP), and LDK Solar Co. Ltd. (NYSE: LDK) have taken a beating. Higher priced makers like SunPower Corp. (NASDAQ: SPWRA) are getting even more punishment. Solyndra is in bankruptcy now because it could not get its cost structure in line with the collapse in panel pricing.

The lower prices have had the expected effect though. Even as countries have lowered solar subsidies, falling panel prices have kept demand reasonably high because the cost of installing solar is reaching a point where it is price-competitive. Firms like First Solar, SunPower, MEMC Electronic Materials Inc. (NYSE: WFR) that have acquired project development companies are able to cope better with the decline in panel prices because they have both a captive and growing market.

There’s little argument that the falling price of modules have extended the market for solar PV, which is why the trade case filed by SolarWorld and the unnamed US solar panel makers is getting no support from firms like First Solar, SunPower, or MEMC. In fact, a rival group, called CASE, the Coalition for Affordable Solar Energy, has been quickly put together to fight against the SolarWorld-led trade case.

Their argument is that falling prices for solar modules have brought solar generation prices down to near grid parity with coal and natural gas generation. Slapping a tariff on solar panels will essentially kill the gains made by the industry. In fact, a Chinese solar project developer has said that a 30% tariff on imported solar panels will make uneconomic $500 million in new solar developments the company has planned in the US.

US energy company Sempra Energy (NYSE: SRE) is building a 700-megawatt solar farm project near Phoenix that will use 200 megawatts of panels from Suntech. If the trade case is decided in favor of SolarWorld, panels from US makers like First Solar could be substituted, but the entire cost of the project would rise, changing the power purchase agreement that is the basis for the project and, ultimately perhaps, making the project uneconomic. The loss of the installation jobs would cost the US economy more than it would gain from having a US maker supply the panels. US makers build most of their panels overseas anyway.

SolarWorld is the largest maker of solar panels in the US, and employs about 1,300 workers at its plant near Portland, Oregon. A grand total of all US workers involved in making solar panels for distribution and sale could not exceed 3,000, while more than 52,000 US jobs are supported by solar installers. In terms of US job creation, the numbers support low-cost modules and high installation counts.

That JinkoSolar or some of the other solar makers may go bust is a near certainty. There are too many makers with too much capacity all angling for too few projects. But as module prices continue their decline, it becomes unnecessary for governments to subsidize more solar installations and more solar projects are very likely to make it off the drawing board.

One solar industry official (from a project installer) has likened the fight over dumping to a circular firing squad, where everyone is going to take some hits. The survivors will be those who bleed the least.

Paul Ausick

Filed under: Alternative Energy, Green Biz Tagged: FSLR, JASO, JKS, LDK, SPWRA, SRE, STP, TSL, WFR

US Takes Up Solar Makers’ Case Against China (FSLR, SPWRA, TSL, JASO, LDK, RSOL)

Paul Ausick — Thu, 10 Nov 2011 14:05:01 +0000

The US Department of Commerce has begun its investigation of a trade complaint accusing Chinese makers of solar PV modules of dumping their goods on the US market at less than the cost of manufacturing. The complaint also claims that China’s government pays subsidies to the country’s solar PV makers, a practice that is not allowed under international trade rules for exported goods. The Commerce Department now has four months to investigate and issue a preliminary decision on the dumping claim.

Seven US solar PV makers jointly filed the claim last month, but only the US unit of Germany’s SolarWorld was identified. Top US solar makers First Solar Inc. (NASDAQ: FSLR) and SunPower Corp. (NASDAQ: SPWRA) are not among the companies that signed on. No specific Chinese makers were identified in the complaint, but leading makers like Trina Solar Ltd. (NYSE: TSL), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), and LDK Solar Inc. (NYSE: LDK) are surely among the targets.

The solar industry in the US is divided, though, over this trade case. Solar system installers, like Real Goods Solar Inc. (NASDAQ: RSOL), Sungevity, and SolarCity, have welcomed the falling module prices because the lower costs mean more people are installing solar systems on homes and businesses. New financing schemes have enticed many homeowners and businesses to install solar panels at essentially no up-front cost and then pay a monthly rental fee or a monthly power usage fee. One might argue that the easy financing that is becoming available is more responsible for the increase in solar installations than is the low cost of the panels.

The Solar Energy Industries Association, a US trade group, issued the following statement when the complaint was filed: “Global trade in solar products has been good for the United States by expanding export opportunities for domestic manufacturers, creating jobs and driving down costs to consumers.” The group recognizes that most of the jobs being created in the US solar industry are not coming from manufacturing the solar cells and modules, but from making the other pieces that go into a solar system and from installing the systems.

The solar industry estimates that more than 100,000 US jobs are attributable to making, selling, and installing solar PV systems. Of that number, more than half are installers working for about 10,000 different firms. Some 25,000 jobs are classified as manufacturing, but of that number a generous estimate of how many are actually making cells and modules would top out at about 3,000. The rest make racks and glass and inverters. SolarWorld, the largest solar PV maker in the US, employs 1,300 people at its Oregon plant.

First Solar employs about 4,500 of its total workforce of 6,100 in manufacturing, but 4,100 of those manufacturing jobs are located in Malaysia, Germany, and Vietnam. SunPower employs about 5,150 people, of which 4,100 are manufacturing employees in the Philippines. First Solar planned to employ about 4,800 US workers at a new plant it was building in Arizona, but its recent stock price declines have put that project on hold for an unspecified length of time.

The Chinese government did make loans totalling more than $25 billion to many of its solar PV makers last year to support capacity expansion. Because so much of the country’s manufacturing capacity is dedicated to export, it is at least arguable that the Chinese are violating trade rules related to subsidies. As for the dumping charge, the Chinese claim that economies of scale are driving the price declines.

Penalizing Chinese solar PV makers with higher tariffs, if they are indeed found guilty of anti-competitive practices, will raise the cost of solar modules and US installers could find themselves scrambling for work. The impact of those job losses would be greater than any losses in the solar manufacturing space. Even if the Chinese are found guilty of dumping, the likelihood of a significant tariff on solar modules is fairly remote.

Even more remote is the likelihood that US solar PV makers will benefit significantly from a win. The federal government is unlikely to invest in new manufacturing capacity (think, Solyndra), and private financing for capacity expansion stands no chance of being offered. Why would a bank finance a facility that would be uncompetitive in its market? If First Solar, still the low-cost leader, can’t see its way to adding manufacturing capacity, there’s no reason to think that a smaller company has a better chance.

SolarWorld and its partners picked a good time to file this complaint. The Obama administration has to support the case because the issue has been framed as pitting US workers and US jobs against those cheating Chinese. Going into an election year when unemployment and a weak economy are sure to play a large role in the outcome, no President and no candidate is likely to come down on the side of the Chinese solar makers in this case.

Paul Ausick

Filed under: Alternative Energy, China, Green Biz, Regulation, Utilities Tagged: FSLR, JASO, LDK, RSOL, SPWRA, TSL

24/7 Wall St. Closing Bell (GRPN, BIG, DAL, RGLD, SD, SPWRA, TSL, SBUX, LNKD, ANLY, OXGN, RST, MTZ, ALJ, DRWI, LEDS, CHK, IPSU, SGEN)

Paul Ausick — Fri, 04 Nov 2011 20:09:35 +0000

Markets opened lower this morning, and a modest gain of 80,000 non-farm jobs and a slight improvement of the US unemployment rate to 9.0% didn’t lift investors’ spirits before the opening. Today’s confidence vote in Greece kept financial stocks down as investors try to figure out what it will mean if the Greek prime minister is booted out and the country doesn’t accept the latest batch of austerity tied to the country’s $180 billion bail-out package. The IPO of Groupon Inc. (NASDAQ: GRPN) went off at $20, with shares rising to $31.44 before pulling back to $26.11 in the last half hour of trading. Crude oil is basically flat and gold has pulled back less than -0.5%. The dollar is slightly stronger against both the euro and the yen, putting weight on commodities.

The unofficial closing bells put the DJIA down more than 61 points to 11,983.32 (-0.51%), the NASDAQ fell more than 11 points (-0.44%) to 2,686.15, and the S&P 500 fell -0.63% or more than 7 points to 1,253.23.

There were several analyst upgrades and downgrades today, including Big Lots, Inc. (NYSE: BIG) raised to ‘outperform’ at Wedbush. Delta Air Lines (NYSE: DAL) was raised to ‘outperform’ at Zack’s and was named the firm’s Bull of the Day; Royal Gold Inc. (NASDAQ: RGLD) was cut to ‘sector perform’ at National Bank; SandRidge Energy Inc. (NYSE: SD) was cut to ‘hold’ at Stifel Nicolaus; Sunpower Corp. (NASDAQ: SPWRA) was cut to ‘underperform’ at Macquarie; and Trina Solar Ltd. (NYSE: TSL) was cut to ‘neutral’ at Macquarie. We noted a change in the solar sector earlier today.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Starbucks Corp. (NASDAQ: SBUX) is up about 6.4%, at $44.04, after posting a new 52-week high earlier in the day; LinkedIn Corp. (NASDAQ: LNKD) is down more than -6%, at $82.09; Analysts International Corp. (NASDAQ: ANLY) is up nearly 28%, at $4.67; Oxigene, Inc. (NASDAQ: OXGN) is down -33%, at $1.22; Rosetta Stone, Inc. (NYSE: RST) is down more than -23%, at $7.77, after posting a new low earlier today; and MasTec, Inc. (NYSE: MTZ) is down -20%, at $17.52.

Several other standouts from today are as follows…

Alon USA Energy, Inc. (NYSE: ALJ) is up nearly 46%, at $11.40. The Israeli-based oil refiner has struck a deal to receive 25,000 barrels/day of WTI crude at its Louisiana refinery, which will give its margins a sharp boost.

DragonWave, Inc. (NASDAQ: DRWI) is up 36%, at $4.91. The company has agreed to buy the microwave business from the joint venture Nokia Siemens Networks.

SemiLEDS Corp. (NASDAQ: LEDS) is up nearly 37%, to $4.04. The company got a huge boost from the Chinese government’s announcement that it will ban incandescent light bulbs beginning next year.

Chesapeake Energy Corp. (NYSE: CHK) is down more than -6%, at $27.24. The company reported better-than-expected earnings this morning, but asset sales to generate cash are causing concerns among investors.

Imperial Sugar Co. (NASDAQ: IPSU) is down more than -12%, at $6.01, after posting a new 52-week low of $5.75 earlier today. The company is suspending its quarterly dividend.

Seattle Genetics Inc. (NASDAQ: SGEN) is down about -18%, at $18.02. The shares posted an all-time high earlier this week, but the stock price run-up may have exaggerated the company’s growth prospects.

Stay tuned for Monday. Boston Federal Reserve president Eric Rosengren is giving a speech in the morning. We have noted the following events (all times Eastern):

11:00 a.m. – Four-week Treasury bill announcement
11:30 a.m. – Three- and six-month Treasury bill auction
3:00 p.m. – Federal Reserve consumer credit report

Paul Ausick

Filed under: Analyst Calls, HI/LOW, Market Close Tagged: ALJ, ANLY, BIG, CHK, DAL, DRWI, GRPN, IPSU, LEDS, LNKD, MTZ, OXGN, RGLD, RST, SBUX, SD, SGEN, SPWRA, TSL

SunPower, First Solar, Chinese Solar Makers Retrenching (SPWRA, FSLR, JASO, STP, TSL)

Paul Ausick — Fri, 04 Nov 2011 15:33:28 +0000

The train wreck more widely known as the solar sector may finally be adjusting to reality and trying to get back on the tracks. SunPower Corp. (NASDAQ: SPWRA) reported earnings after the markets closed yesterday and said that it would reduce its costs by 10%. First Solar Inc. (NASDAQ: FSLR) announced plans to put off construction of a new plant in Vietnam. Chinese makers JA Solar Holdings Co. Ltd. (NASDAQ: JASO), Suntech Power Holding Co. Ltd. (NYSE: STP), and Trina Solar Ltd. (NYSE: TSL) have also announced plans to halt capacity increases. These companies have all just discovered the wheel it seems.

The solar PV over-supply issue became evident in the summer of 2010, following loans totalling nearly $30 billion to its solar makers, mostly to expand manufacturing capacity. The intention was to drive down costs — and prices — by flooding the market with Chinese-made panels. That might have been a good strategy if other governments had maintained their high subsidies for solar PV installations.

But when Germany cut its feed-in tariff, followed by a similar cut in Italy, the market for solar panels in Europe dropped dramatically. The US and China took up some of the slack, but not enough. Prices for modules have fallen to the point where crystalline-based panels are very near the $1/watt level. With the exception of First Solar, it is nearly impossible for any of the solar makers to tease out a profit at that price.

SunPower managed to meet EPS estimates of $0.16, but missed on revenues. For the current quarter, the company is forecasting EPS in the range of -$0.15 to $0.10. The consensus estimate had been for EPS of $0.69. The company also forecast gross margin for the fourth quarter of 7%-9%, down from non-GAAP gross margin of 11.4% in the third quarter.

SunPower’s cost reduction program is expected to cut 10% for its operating costs in 2012, which is nice, but total operating expenses in the third quarter came to about $500 million. For a full year, the expected savings would be around $200 million. Not bad, but likely not enough.

First Solar plans to stop construction of its new Vietnamese plant, but will continue to develop the plant it is building in Mesa, Arizona. The company also announced an efficiency improvement in its solar cells and said that manufacturing improvements will yield a 10% increase on each of its production lines.

JA Solar, Suntech, and Trina have all indicated that they plan to slow manufacturing capacity increases due to high inventory levels and low pricing. Trina also lowered its third-quarter guidance on module shipments from 480-520 megawatts to 372-375 megawatts. Gross margins are expected to be 10%-11%, compared with earlier guidance in the mid- to high teens. Seasonality effects could put an even larger crimp in shipments, forcing the Chinese makers to fire workers and cut spending even more.

SunPower’s shares are down more than -1.6% in mid-morning trading, at $8.62 in a 52-week range of $6.60-$23.36. First Solar shares are up nearly 8%, at $52.01, in a 52-week range of $42.50-$175.45. Trina shares are up about 3.7%, at $8.11, in a 52-week range of $5.28-$31.08.

Paul Ausick

Filed under: Alternative Energy, Earnings, Green Biz Tagged: FSLR, JASO, SPWRA, STP, TSL

Top Active Trader Stocks This Morning (ALU, CEDC, CHK, ENTR, FSLR, LNKD, MTZ, OXGN, SBUX, SPWRA, VVUS, YRCW)

Administrator — Fri, 04 Nov 2011 12:44:04 +0000

We have several big movers in the after-hours session. We have compiled a news summary and shown the after-hours moves in the following shares this Thursday evening: Alcatel-Lucent, S.A. (NYSE: ALU); Central European Distribution Corp. (NASDAQ: CEDC); Chesapeake Energy Corporation (NYSE: CHK); Entropic Communications, Inc. (NASDAQ: ENTR); First Solar, Inc. (NASDAQ: FSLR); LinkedIn Corporation (NYSE: LNKD); MasTec, Inc. (NYSE: MTZ); OXiGENE Inc. (NASDAQ: OXGN); Starbucks Corporation (NASDAQ: SBUX); SunPower Corporation (NASDAQ: SPWRA); VIVUS, Inc. (NASDAQ: VVUS); and YRC Worldwide Inc. (NASDAQ: YRCW).

Alcatel-Lucent, S.A. (NYSE: ALU) is getting a smackdown after earnings and after dialing its expectations back down. The pain continues and shares are down 13.4% at $2.39.

Central European Distribution Corp. (NASDAQ: CEDC) missed earnings and lowered its estimates again for ahead. Shares are down 23.6% at $3.85 in active pre-market trading.

Chesapeake Energy Corporation (NYSE: CHK) beat earnings at $0.72 EPS versus $0.66 estimates; shares are up 5.5% at $30.64 before the open.

Entropic Communications, Inc. (NASDAQ: ENTR) is down less than the 11% drop last night after it managed to beat estimates at $0.12 EPS. Shares are down almost 8% at $5.46.

First Solar, Inc. (NASDAQ: FSLR) was up another 4% at $50.08 last night after the company announced manufacturing consolidation moves that will delay a Vietnam plant from opening. Shares are up only about 1.7% this morning at $49.00 due to a downgrade and due to poor earnings from competitors.

LinkedIn Corporation (NYSE: LNKD) reported a loss and said it was selling $100 million in new stock. Shares are down 10.6% at $78.16 before the open.

MasTec, Inc. (NYSE: MTZ) is indicated down over 10% on no volume; shares were down 12.8% last night. It beat earnings but guidance was mostly in-line.

OXiGENE Inc. (NASDAQ: OXGN) is now down 34% at $1.20 after showing its final data from Phase 2 FALCON study for its ZYBRESTAT in treating Non-Small Cell Lung cancer. This is even worse than it was last night.

Starbucks Corporation (NASDAQ: SBUX) is up 3.5% at $42.85 after earnings on Thursday. The coffee destination retailer posted a 29% rise in profits and it raised the dividend and increased shares under a buyback plan.

SunPower Corporation (NASDAQ: SPWRA) is indicated down over 6% at $8.20 after reporting mixed earnings and lowering guidance. Should this really still be a surprise?

VIVUS, Inc. (NASDAQ: VVUS) is higher on an upgrade and on news that Qnexa’s Phase III data published in obesity showed a 14.4% average weight loss in severely obese patients completing one year of treatment. Shares are up 3.8% at $9.85.

YRC Worldwide Inc. (NASDAQ: YRCW) was doing better after an analyst removed the “Sell” rating and after a new CFO has been named. Earnings were released and shares are now up less than 2% but on well over 3 million shares in pre-market trading.

JON C. OGG

Filed under: Pre-Market Activity, Trading Alert Tagged: ALU, CEDC, CHK, ENTR, FSLR, LNKD, MTZ, OXGN, SBUX, SPWRA, VVUS, YRCW

Top Analyst Upgrades & Downgrades (BIG, CHS, DAL, ERII, PPG, PLXS, GOLD, RGLD, SD, SWK, SPWRA, RIG, TSL, VICL, VVUS, YRCW)

Administrator — Fri, 04 Nov 2011 12:25:18 +0000

These are some of Friday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls.

Big Lots Inc. (NYSE: BIG) Raised to Outperform at Wedbush.
Chico’s FAS Inc. (NYSE: CHS) Cut to Neutral at Citigroup.
Delta Air Lines (NYSE: DAL) Raised to Outperform as Bull of the Day at Zacks.
Energy Recovery Inc. (NASDAQ: ERII) Started as Neutral at Credit Suisse.
PPG Industries, Inc. (NYSE: PPG) named as Value stock of the Day at Zacks.
Plexus Corporation (NASDAQ: PLXS) named Bear of the Day at Zacks.
Randgold Resources Limited (NASDAQ: GOLD) Cut to Hold at Canaccord Genuity.
Royal Gold, Inc. (NASDAQ: RGLD) Cut to Sector Perform at National Bank.
SandRidge Energy, Inc. (NYSE: SD) Cut to Hold at Stifel Nicolaus.
Stanley Black & Decker Inc. (NYSE: SWK) Raised to Buy at Argus.
SunPower Corporation (NASDAQ: SPWRA) Cut to Underperform at Macquarie.
Transocean Ltd. (NYSE: RIG) Cut to Underperform at Macquarie.
Trina Solar Limited (NYSE: TSL) Cut to Neutral at Macquarie.
Vical Inc. (NASDAQ: VICL) Started as Outperform with $7 target at Credit Suisse.
VIVUS, Inc. (NASDAQ: VVUS) Started as Outperform with $15 target at Credit Suisse.
YRC Worldwide Inc. (NASDAQ: YRCW) Raised to Hold fro Sell at Stifel Nicolaus.

JON C. OGG

Filed under: Analyst Calls Tagged: BIG, CHS, DAL, ERII, gold, PLXS, PPG, RGLD, RIG, SD, SPWRA, SWK, TSL, VICL, VVUS, YRCW

Taxpayer Bailout Irony: Banks Better Investments Than Alternative Energy (AIG, BCON, PLD, F, GM, TSLA, HTM, SPWRA, FSLR, BAC)

Administrator — Thu, 03 Nov 2011 10:17:01 +0000

There is some food for thought in the world of alternative energy against the hatred of banks. It is a very painful observation, but it is turning out to be that the government may have done far better financially by backing the banks with rescue loans than in its loan guarantee efforts in alternative energy.

Earlier this year came reports that the publicly hated Troubled Asset Relief Program (the TARP) was going to generate some $24 billion in profits for the Treasury Department. Some immediately challenged the math on how that profit was tallied up, but the wave of bankruptcies in DOE-backed loan guarantees is currently creating a dilemma that only heats up the debate between environmental issues and capitalism. With the exception of American International Group, Inc. (NYSE: AIG), the “too big to fail” institutions have by and large paid Uncle Sam back what was borrowed under the TARP.

The DOE website shows some $35.9 billion in total loans over nearly 40 projects since 2009 which were listed as being able to create some 60,000 jobs, and which could provide enough clean electricity to power three-million homes with a claim of saving some 300-million gallons of gasoline each year.

The problem is that the half-billion dollar loan to Solyndra in California was the worst investment made in alternative energy. Other bankruptcies from Evergreen Solar and Beacon Power Corporation (NASDAQ: BCON) have only added more public scrutiny over how financially feasible many alternative energy companies are.

Prologis, Inc. (NYSE: PLD) may be an unlikely “green company” in office warehouse operations, but it was adding solar panels to the roofs of its warehouses throughout most of the nation where it could generate power for use or resale back into the grid. These projects appear all over the DOE loan guarantee map of the United States.

Ford Motor Co. (NYSE: F) is supposed to be the most publicly appreciated car company in America because it did not take any government bailouts while General Motors Corp. (NYSE: GM) still has Uncle Sam owning a large part of the company. Under the ATVM loan guarantees seen, Ford was listed on the DOE program site as having had just over $5.9 billion from a 2009 guarantee and Tesla Motors, Inc. (NASDAQ: TSLA) was given part of an ATVM loan program in early 2010, .

US Geothermal Inc. (AMEX: HTM) is another troubled sub-$1.00 stock and it has received $97 million in DOE loan guarantees. It was as recently as the end of this August that the company noted the first funding drawdown under the $96.8-million loan guarantee to construct its planned 23-megawatt-net power plant at Neal Hot Springs in Eastern Oregon.

Others in Solar deals which have either directly received loan guarantees or which were shown to be working in the projects over the last year or so were SunPower Corporation (NASDAQ: SPWRA) and First Solar Inc. (NASDAQ: FSLR). First Solar noted at the end of September that the Topaz Solar Farm project will not meet the statutory deadline to receive a federal loan guarantee from the DOE.

Bank of America Corporation (NYSE: BAC) does not have any of that TARP money in it, and its shares are the worst performing by far of all of the money-center banks deemed as “too big to fail” with a drop of 56% from its 52-week high. First Solar is down about 74% from its 52-week high and SunPower is down about 60% from its 52-week high. Those losses are quite common throughout almost the entire solar and alternative energy sector.

The U.S. Green Building Council touts on its website that a study from Booz Allen Hamilton was released by USGBC in November 2009 predicting that green building would support or create 7.9 million jobs between 2009 and 2013 and would contribute $554 billion to the gross domestic product. That seems a bit impossible now… Doesn’t it?

It has been sad to see and it is nearly painful to say, but Uncle Sam has at least so far proven to be a better fiduciary of investing in the banking sector than it has in picking alternative energy companies. Maybe that will change in the quarters ahead, or maybe not. We are talking about the government after all.

JON C. OGG

Filed under: Alternative Energy, Banking, Bankruptcy, Brokerage Firms, Corporate Governance, Economy, Green Biz, Politics, Tax Tagged: AIG, BAC, BCON, F, FSLR, GM, HTM, PLD, SPWRA, TSLA

First Solar Earnings… When Bad Is Finally Good Enough (FSLR, SPWRA, STP, TAN)

Administrator — Wed, 26 Oct 2011 12:43:49 +0000

First Solar Inc. (NASDAQ: FSLR) went ahead and got its earnings report out of the way. After all, it botched its “CEO exit” so badly yesterday that it was an unfair burden to shareholders. Shares closed ll the way down at $43.27 on the news.

The U.S. solar leader reported earnings of $2.25 EPS on revenues of $1.01 billion but the lower figures appear to be good enough now that the shares have been battered and bruised this much. Thomson Reuters had estimates at $2.64 EPS and $1.01 billion in revenues.

First Solar guided 2011 results to $6.50 to $7.50 EPS and it is effectively lowering fourth quarter sales targets because the revenue target for the year is now being put in a range of $3.0 to $3.3 billion. Thomson Reuters had consensus estimates at $8.84 EPS and $3.59 billion in revenues. So, that about 6-times to 8-times this year’s earnings.

This all implies a lower 2012, which we have already reported on numerous times, and the company is going to slow down its capital spending plans in 2012 to protect margins.

This is bad news about the guidance, but all that needs to be remembered that this was a $70 as recently as the end of September and was a $100 stock as recently as the end of August. Shares closed at $43.27 yesterday but shares are indicated up 8% at $46.80 this morning.

When the CEO left yesterday there was an obvious fear. We did not want to contribute to the rumor mill, but the most obvious fear was likely some serious irregularities or perhaps something even worse. Again, we did not (and do not) want to speculate too much even if the company did the worst “CEO exit” in some time.

Rivals are not really on the move at the same rate. SunPower Corporation (NASDAQ: SPWRA) is barely up at all and it is still under $10.00. Suntech Power Holdings Co. Ltd. (NYSE: STP) is up over 5% at $2.36. No move has yet been seen in Guggenheim Solar (NYSE: TAN) ETF either.

JON C. OGG

Filed under: Alternative Energy, Earnings, Earnings Warning, Green Biz Tagged: FSLR, SPWRA, STP, TAN

Expected Price Gains in Solar Stocks Are Strictly Illusions (AMAT, FSLR, WFR, GTAT, SPWRA, STP, TSL, LDK, JASO)

Paul Ausick — Mon, 24 Oct 2011 17:09:39 +0000

About a month and a half ago, we looked at several solar stocks to try to determine if there happened to be a good value play in the sector. Given the significant drop in share prices since the beginning of the year, the stocks looked more like value traps than values, with one possible exception. Since that time, the outlook for the sector has deteriorated even more. We decided to take another look at the five stocks and have added four of the Chinese solar makers to give a more complete view of what’s going on in the sector. The stocks we have looked at are Applied Materials (NASDAQ: AMAT), First Solar (NASDAQ: FSLR), MEMC Electronic Materials (NYSE: WFR), GT Advanced Technologies (NASDAQ: GTAT), SunPower (NASDAQ: SPWRA), Suntech Power (NYSE: STP), Trina Solar (NYSE: TSL), LDK Solar (NYSE: LDK) and JA Solar (NASDAQ: JASO).

The most noticeable data point is how far off these stocks are from their 52-week highs. The U.S.-based stocks are off nearly 60%, while the China-based companies are down a minimum of 75%. Trina and LDK have been hit with accounting questions, as have many other Chinese firms, and that has carried over to the other Chinese solar makers as well. That is likely the cause of the 15% differential in current distance from the 52-week high.

Applied Materials has a median target price of $12.50 from 17 brokers. Shortly before noon today, shares are trading at $11.96, for an implied gain of $0.54, or 4.5%. Applied’s forward P/E is 12.46 and the company pays a dividend yield of 2.7%. The stock’s 52-week trading range is $9.70 to $16.93, and at today’s price that is about 23% above its 52-week low, posted earlier this morning, and 29% below the 52-week high. Applied’s dividend yield has dropped from nearly 3% six weeks ago, its price target has fallen from $13.88, and it has posted a new 52-week low. At our last look, this was the one company that looked like it might be a value play, but that view is getting weaker by the day. Applied is the only company in this group that pays a dividend.

First Solar has a median target price of $108.50 from 34 brokers. Shortly before noon, shares are trading today at $60.22, for an implied gain of $48.28, or 80%. First Solar’s forward P/E is 5.97 and the company does not pay a dividend. The stock’s 52-week trading range is $50.87 to $175.45, and at today’s price that is about 18% above its 52-week low and 66% below the 52-week high. First Solar is the largest of the solar panel makers measured by market cap. The company’s low-cost leadership has been challenged by the constantly falling prices of crystalline solar manufacturers, particularly the Chinese. Once a growth stock, First Solar shares have performed miserably so far this year.

MEMC Electronic Materials has a median target price of $9.00 from 20 brokers. Shortly before noon today, shares are trading at $6.19, for an implied gain of $2.81, or 45%. MEMC’s forward P/E is 5.84 and the company does not pay a dividend. The stock’s 52-week trading range is $4.58 to $15.04, and at today’s price that is about 35% above its 52-week low and 59% below the 52-week high. MEMC has been able to hold the line somewhat on solar wafers in the face of increasing competition from Chinese makers. The company, like First Solar and SunPower, also owns a solar project development company, SunEdison, and if there is any growth in the solar sector, it is in financing and installing rooftop systems. The project groups of these three companies are geared toward industrial-scale projects, though, so they will have to change direction or they will not see much benefit from rooftop installation growth.

GT Advanced Technologies has a median target price of $15.00 from 25 brokers. Shortly before noon, shares are trading today at $7.34, for an implied gain of $7.66, or 104%. GT’s forward P/E is 3.94 and the company does not pay a dividend. The stock’s 52-week trading range is $6.40 to $17.50, and at today’s price that is about 15% above its 52-week low and 58% below the 52-week high. Formerly known as GT Solar, this company had a breakout first half of 2011 as the expansion of China’s manufacturing capacity created high demand for GT’s specialized manufacturing equipment. Now that capacity exceeds demand, new orders have slowed and prospects for growth are dimming.

SunPower has a median target price of $13.00 from 13 brokers. Shortly before noon today, shares are trading at $9.67, for an implied gain of $3.33, or 34%. SunPower’s forward P/E is 9.28 and the company does not pay a dividend. The stock’s 52-week trading range is $6.60 to $23.36, and at today’s price that is about 47% above its 52-week low and 59% below the 52-week high. SunPower’s shares jumped to 52-week highs on the offer by French energy giant Total SA (NYSE: TOT) to acquire 60% of SunPower’s stock. Shares have tumbled since then, and it is not unthinkable that Total overpaid for the company. SunPower is not a low-cost provider of solar panels, and that could limit the company’s growth going forward.

Suntech Power has a median target price of $4.00 from 30 brokers. Shortly before noon today, shares are trading at $2.37, for an implied gain of $1.63, or 69%. Suntech’s forward P/E is 34.29 and the company does not pay a dividend. The stock’s 52-week trading range is $1.70 to $10.83, and at today’s price that is about 39% above its 52-week low and 78% below the 52-week high. Suntech now makes more solar modules than any other company in the world. That would be great, if the company could sell the modules at a price that offers it a profit. A recent trade case against Chinese solar makers could push these stocks down even more.

Trina Solar has a median target price of $15.00 from 26 brokers. Shortly before noon, shares are trading today at $7.70, for an implied gain of $7.30, or 95%. Trina’s forward P/E is 6.26 and the company does not pay a dividend. The stock’s 52-week trading range is $5.28 to $31.08, and at today’s price that is about 46% above its 52-week low and 75% below the 52-week high. Like Suntech, Trina is a low-cost, high-volume maker of solar panels and it faces all the same problems.

LDK Solar has a median target price of $5.80 from 14 brokers. Shortly before noon today, shares are trading at $3.27, for an implied gain of $2.53, or 77%. LDK’s forward P/E is 10.64 and the company does not pay a dividend. The stock ’s 52-week trading range is $2.55 to $15.10, and at today’s price that is about 28% above its 52-week low and 78% below the 52-week high. LDK’s implied growth of 77% is pure fiction, at least through the end of 2013.

JA Solar has a median target price of $3.00 from 14 brokers. Shortly before noon today, shares are trading at $2.30, for an implied gain of $0.70, or 30%. JA Solar’s forward P/E is 5.43 and the company does not pay a dividend. The stock’s 52-week trading range is $1.46 to $9.77, and at today’s price that is about 58% above its 52-week low and 76% below the 52-week high. JA Solar shares are the furthest above their 52-week low of any of the stocks in the group. That might be good news if the forward P/E were greater than 5.43. Like the other Chinese makers, this stock is very weak and could be the first of all these stocks to bust the buck on the way down.

Paul Ausick

Filed under: Alternative Energy, Analyst Calls, China, Green Biz, Value Investing Tagged: AMAT, FSLR, GTAT, JASO, LDK, SPWRA, STP, TOT, TSL, WFR