The unofficial closing bells put the DJIA up nearly 7 points to 12,890.61 (0.05%), the NASDAQ rose more than 11 points (0.39%) to 2,927.23, and the S&P 500 rose 0.15% or 2 points to 1,351.96.

There were several analyst upgrades and downgrades today, including A123 Systems, Inc. (NASDAQ: AONE) cut to ‘sell’ at Wunderlich; Expedia Inc. (NASDAQ: EXPE) cut to ‘hold’ at S&P Capital IQ; Research in Motion Ltd. (NASDAQ: RIMM) reiterated as ‘hold’ with $15 target price at Cannacord Genuity; Amgen Inc. (NASDAQ: AMGN) cut to ‘perform’ at Oppenheimer and named ‘Bull of the Day’ at Zacks; and 3M Co. (NYSE: MMM) cut to ‘hold’ at Deutsche Bank. Apple Inc. (NASDAQ: AAPL) got a lift from a target price increase to $665, which we cover here. We’ve also got a story on how Apple gets 80% of the operating profit among all the phone makers.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Cisco Systems Inc. (NASDAQ: CSCO) is down -2.1% at $20.00 (here’s our coverage); American Superconductor Corp. (NASDAQ: AMSC) is down -8.74% at $5.50; Bunge Ltd. (NYSE: BG) is up 5.9% at $63.25; Dunkin’ Brands Inc. (NASDAQ: DNKN) is down -2.35% at $28.33; Lorillard Inc. (NYSE: LO) is up 9.8% at $124.46 after posting a new 52-week high of $127.68 earlier today; Pepsico Inc. (NYSE: PEP) is down -3.6% at $64.37 (our coverage here); Philip Morris International Inc. (NYSE: PM) is up 2.8% at $80.08 after setting a new 52-week high of $80.99 earlier today; Sirius XM Radio Inc. (NASDAQ: SIRI) is nearly flat at $2.19 (additional coverage here); and Teradata Corp. (NYSE: TDC) is up 10% at $63.85 after posting a new 52-week high earlier today of $64.97.

Other standouts from today include the following stocks:

Imperial Sugar Co. (NASDAQ: IPSU) is up more than 79% at $6.02. The sugar refiner and marketer said it is nearing a sale of one of its divisions.

Trina Solar Ltd. (NYSE: TSL) is up 20% at $11.08. The solar panel maker is getting a big boost from a report that China will add about 3,000 megawatts of solar PV generation this year, although some analysts think the total will be double that. Other Chinese solar panel makers are also getting a nice bump from the news. We have another view of the sudden rise here.

Diamond Foods Inc. (NASDAQ: DMND) is down more than -36% at $23.36 after posting a new 52-week low of $21.44 earlier today. The snack food maker will re-state accounting and that jeopardizes the deal to purchase the Pringles brand from Proctor & Gamble (NYSE: PG). See our coverage here.

Groupon Inc. (NASDAQ: GRPN) is down more than -15% at $20.82. The Internet coupon company posted weak earnings last night. See our coverage here.

Taleo Corp. (NASDAQ: TLEO) is up more than 17% at $45.62 after posting a new 52-week high of $45.71. The maker of cloud-based software is being acquired by Oracle Corp. (NASDAQ: ORCL). More coverage here and here.

Ceasars Entertainment Corp. (NASDAQ: CZR) is down about -3.8% at $14.80. The share price nearly doubled at yesterday’s IPO, to a high of $17.90, but the stock is coming back to earth today.

Stay tuned for Friday. Fed Chairman Ben Bernanke and Cleveland Fed president Sandra Pianalto are speakingWe have noted the following events on the schedule (all times Eastern):

• 8:30 a.m. – International trade report
• 9:55 a.m. – Reuters/University of Michigan consumer sentiment report
• 2:00 p.m. – US Treasury budget report

Your email address

subscribe

terms and conditions

Paul Ausick

Many solar stocks are likely experiencing rapid short covering.  Sticking around for the lowest prices after serious success is a sucker’s game.  There may also be a political angle here now that President Obama’s poll numbers are looking a bit better.  The problem is that it is going to take more now than a President with a continued favorable stance to alternative energy.  The fundamentals remain weak and now investors are getting to evaluate whether there is any value of if they are value traps.  Take a look at some of the moves…

First Solar, Inc. (NASDAQ: FSLR) is up 7.5% at $49.29 against a 52-week range of $42.50 to $175.45.  The most recent short interest data showed that the short interest was 18 million shares and that was actually down from most reports in the fourth quarter of 2011

SunPower Corporation (NASDAQ: SPWR) is up over 13% at $8.53 today against a 52-week range of $4.94 to $23.36. The most recent short interest data showed that the short interest was 5.7 million shares, down from a November peak of 9.3 million shares and much lower than the 11.7 million shares short back at the end of June.

Energy Conversion Devices, Inc. (NASDAQ: ENER) is even up 12% to $1.29 and no longer at much of a delisting risk.  Its 52-week range is $0.20 to $4.29. The most recent short interest data showed that the short interest was 11.4 million shares at the lowest levels in a year since it had become a penny stock.

Trina Solar Limited (NYSE: TSL), out of China, is up a whopping 24% at $11.44 against a 52-week range of $5.28 to $31.08.  That makes for a gain of 70% so far in 2011 and it would have to almost rise 200% to challenge its year-high. The most recent short interest data showed that the short interest was 15.5 million shares.

MEMC Electronic Materials, Inc. (NYSE: WFR) is also up 8% at $5.78 against a 52-week range of $3.65 to $15.04.  That gives a gain of almost 47% so far in 2012.  The most recent short interest data showed that the short interest was 14.5 million shares and that was actually higher than at the end of 2011 even if it is lower than prior months.

JON C. OGG

Among the major movers at around noon today are Imperial Sugar Co. (NASDAQ: IPSU), Diamond Foods Inc. (NASDAQ: DMND), Trina Solar Ltd. (NYSE: TSL), Array BioPharma Inc. (NASDAQ: ARRY), and A123 Systems Inc. (NASDAQ: AONE).

Imperial Sugar is up nearly 49% at $5.00. Volume is about already about 8x the daily average of about 430,000 shares traded. The sugar refiner and marketer said it is nearing a sale of one of its divisions.

Diamond Foods is down more than -36% at $23.31 after posting a new 52-week low of $21.44 earlier this morning. Volume is nearly 10x the daily average of 2.6 million shares traded. The snack food maker will re-state accounting and that jeopardizes the deal to purchase the Pringles brand from Proctor & Gamble (NYSE: PG). See our coverage here.

Trina Solar is up about 23% at $11.34. Volume is about 3x the daily average of around 3.3 million shares traded. The solar panel maker is getting a big boost from a report that China will add about 3,000 megawatts of solar PV generation this year, although some analysts think the total will be double that. Other Chinese solar panel makers are also getting a nice bump from the news.

Array BioPharma is down more than -16% at $2.66. About 5 million shares have traded by mid-day, compared with a daily average of around 360,000. The pharmaceutical maker has priced a secondary offering of 20 million shares at $2.60.

A123 shares are down more than -13% at $2.14. More than 4.7 million shares have already traded this morning, compared with a 3-month daily average of about about 2.7 million shares. The battery maker was downgraded to ‘sell’ at Wunderlich on the failure of one of its customers, Fisker Automotive, to secure additional federal funding.

Paul Ausick

The unofficial closing bells put the DJIA up about 46 points to 12,625.19 (0.37%), the NASDAQ rose more than 18 points (0.67%) to 2,788.33, and the S&P 500 rose 0.5% or more than 6 points to 1,314.52.

There were several analyst upgrades and downgrades today, including Visa Inc. (NYSE: V) started as ‘outperform’ at Credit Suisse; Mastercard Inc. (NYSE: MA) started as ‘outperform’ at Credit Suisse; Citigroup Inc. (NYSE: C) maintained ‘sell’ at Argus; Chevron Corp. (NYSE: CVX) maintained as ‘buy’ with target price of $130 but lowered estimates at Argus; and Air Products and Chemicals Inc. (NYSE: APD) cut to ‘neutral’ at JPMorgan.

Earnings reports since markets closed yesterday have led to some price changes as of the last half hour of trading today: Ebay Inc. (NASDAQ: EBAY) is up nearly 4% at $31.55; Sealy Corp. Inc. (NYSE: ZZ) is down nearly -18% at $1.51; Blackrock Inc. (NYSE: BLK) is down -0.75% at $186.39; Bank of America Corp. (NYSE: BAC) is up 2.65% at $6.98; Fairchild Semiconductor International Inc. (NYSE: FCS) is down -3.51% at $14.02; Freeport-McMoran Copper & Gold Inc. (NYSE: FCX) is down -0.22% at $44.37; Morgan Stanley (NYSE: MS) is up 5.42% at $18.29; and Southwest Airlines Co. (NYSE: LUV) is up 3.33% at $9.32.

Other standouts from today include the following stocks:

8×8 Inc. (NASDAQ: EGHT) is up more than 26% at $4.30. The telecom services company reported much better-than-expected earnings for its third fiscal quarter.

Trina Solar Ltd. (NYSE: TSL) is down more than -15% at $8.32. The solar panel maker is falling following Germany’s announcement that it will begin lowering its solar subsidies.

JA Solar Holdings Co. Ltd. (NASDAQ: JASO) is down nearly -15% at $$1.80. This Chinese solar panel maker is suffering from the German subsidy cut as well.

Suntech Power Holdings Co. Ltd. (NYSE: STP) is down -14% at $3.18. Another Chinese solar maker hit by the cuts to German subsidies. The list could go on, but you get the idea.

Stay tuned for Friday. We have noted the following event on the schedule (all times Eastern):

• 10:00 a.m. – Existing home sales

Your email address

subscribe

terms and conditions

Paul Ausick

The Financial Times cites an internal memo from BP Solar’s CEO:

The continuing global economic challenges have significantly impacted the solar industry, making it difficult to sustain long-term returns for the company.

A company spokesperson confirmed the closure, “Over the last six months we have realised that we simply can’t make any money from solar.” Falling prices for solar panels have killed a business that BP has operated for 40 years.

On the same day, a solar industry group called the Coalition for Affordable Solar Energy (CASE) has released a letter to the CEO of Germany’s Solarworld US operations urging the company to withdraw a suit filed with the US International Trade Commission seeking tariff protection on solar panels imported from China. The letter states, that the suit “threatens the planned installation of solar electric power systems in the amount of $11 billion in 2012 and the potential installation of $60 billion currently in the total pipeline.”

The letter goes on to note:

SolarWorld’s petition will do far more damage than good to the U.S. solar industry as a whole. CASE’s membership is representative of 97-98% of America’s solar industry, as the large majority of all U.S. solar industry jobs are downstream of solar panel manufacturing in project development, logistics, construction and installation.

Solar panel makers, even including low-cost Chinese providers, are staggering under collapsing prices, while solar installers, like those that are members of CASE, are getting a big boost from the low prices for solar panels. More than 100,000 Americans are currently employed installing solar projects from rooftops to utility-scale. Solar manufacturing probably accounts for fewer than 5,000 US jobs, not counting workers in US owned factories overseas.

It should be no surprise that BP has finally decided to get out completely.

Paul Ausick

First Solar lowered 2011 sales from $3-$3.3 billion to $2.8-$2.9 billion and cut its profit estimate from $6.50-$7.50/share to $5.75-$6.00/share. The company attributed the drops to “continued delays of certain projects in First Solar’s systems business due to weather and other factors.”

One of those other factors has got to be the explosion of manufacturing capacity for solar PV panels and the concomitant drop in panel pricing. Another is the looming expiration of a tax grant program in the US, which threatens to curb new projects going forward.

For 2012, First Solar guided revenue of $3.7-$4 billion, lower than a consensus estimate of $4.06 billion. The company estimates EPS of $3.75-$4.25, where analysts have been projecting EPS of $7.46.

First Solar also says it is altering its business model, according to the company’s CEO:

[W]e are recalibrating our business to focus on building and serving sustainable markets rather than pursuing subsidized markets. By channeling our core strength in utility-scale PV systems to markets with immediate need for mass-scale renewable energy our goal is to earn substantially all of our new revenues from sustainable markets by the end of 2014.

What he means is that rather than aim at large utility-scale projects that look set to lose their federal incentives, First Solar is going to go after the residential and commercial rooftop solar installation market. That market has finally discovered a financing scheme that does not depend on subsidies, relying instead on bank financing and power purchase agreements for profits.

Whether or not First Solar can make this transition remains to be seen. To help the process along, the company has appointed a new president of global business development. There’s also a shakeup in First Solar’s finance team, where the chief accounting officer will be leaving on May 1st.

First Solar shares are getting pounded this morning, down nearly -21% at $33.72, a new 52-week low.

Paul Ausick

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

Here’s what the CEO had to say in the earnings release: Weak market demand and rapidly declining average selling prices throughout the solar supply chain resulted in shipment volumes and revenues lower than what we previously anticipated. While we continue to believe that the significant opportunities to meet global energy needs with solar power will drive long-term market growth, in the near-term we expect challenging conditions in the solar industry to continue.  As such, we remain focused on strengthening our balance sheet, increasing our operating efficiencies and improving our cost structure.

How exactly does the company plan to strengthen its balance sheet? To increase its operating efficiency, it probably needs to fire people. That won’t go down well. Cutting production might not help either.  How it can improve its cost structure is equally mysterious, given that prices for solar modules continue to decline.

However the company does have a potential ace in the hole. Last September, LDK received a loan package worth $8.9 billion from China Development Bank (CDB) to be used for “long-term growth initiatives and corporate development plans.” LDK was one of several solar and wind-turbine makers to receive a total of $47 billion in what are essentially credit lines from the CDB. According to a recent report from Bloomberg, LDK has drawn on none of that line of credit, although solar makers Yingli Green Energy Holding Co. Ltd. (NYSE: YGE), Suntech Power Holdings Co. Ltd. (NYSE: STP), Trina Solar Ltd. (NYSE: TSL), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), and wind-turbine maker Xinjiang Goldwind have drawn just $866 million to date.

Under the terms of the CDB’s credit lines, a company needs to apply for a loan for a specific project, and the intention when the lines were approved was certainly to grow manufacturing capacity. Interest rates were also high — more than 6.5% according to the Bloomberg report.

At one time, it might have been conceivable that LDK would apply for a loan for what are known as “general corporate purposes” to get it through this rough patch. But given the recent trade case filing against China’s solar makers by a group of US solar makers, if the CDB goes ahead with such a loan, the US solar makers would certainly scream and the US Trade Representative could easily rule in their favor.

China would probably like to avoid that in a perfect world and LDK could in theory be put in the position of taking one for the team. That is, the CDB and the government would let LDK fail just to show that there is nothing funny going on in the country’s solar industry. One possible way for China to dodge either an outright bailout or a bankruptcy of one of its showpiece companies would be to lend money to one of LDK’s competitors for the purpose of acquiring LDK. How or even if those funds would show up on the acquiring company’s balance sheet is anyone’s guess.

LDK’s market cap is currently around $400 million, long-term debt totals about $980 million, and shareholder equity is around $1.2 billion. Under any bankruptcy or reorganization scenario — except the improbable one of LDK pulling out of this mess on its own – shareholders would likely receive nothing.

We do want to stress one thing here and that is that with this being effectively under China it may not ever come about that the company is really forced to file for bankruptcy.  Many companies, even in America, manage to avoid filing for bankruptcy for years and years when they are mathematically bankrupt or insolvent.  Asensio used to blast LDK but we have not heard much from him of late.  Strange things happen in China, and solar “finances” do not avoid that characteristic.

Paul Ausick

Six Chinese solar makers reported earnings after markets closed last night and before they opened again this morning: Suntech Power Holdings Co. Ltd. (NYSE: STP), LDK Solar Co. Ltd. (NYSE: LDK), Canadian Solar Inc. (NASDAQ: CSIQ), Trina Solar Ltd. (NYSE: TSL), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), and JinkoSolar Holding Solar Co. Ltd. (NYSE: JKS). Every one of the six performed much worse than already poor expectations. Here’s the litany of third-quarter failure:

Suntech posted an EPS loss of -$0.64 on revenue of $810 million. The consensus estimate called for an EPS loss of -$0.64 on revenue of $776 million. Gross margin was 13.3% in the quarter, and the company expects that to fall to a range of 9%-11% in the fourth quarter. The company lowered its full-year shipment guidance from 2,200 megawatts to 2,000 megawatts.

LDK Solar posted an EPS loss of -$0.87 on revenue of $472 million. The consensus estimate called for an EPS loss of -$0.46 on revenue of $515 million. Gross margin was -3.6% in the quarter, and the company expects that to rise to 2%-7% in the fourth quarter. The company lowered full-year module shipment guidance from 750-850 megawatts to 55–65 megawatts. LDK also revised wafer and ingot shipments downward.

Canadian Solar posted an EPS loss of -$1.02 on revenue of $500 million. The consensus estimate called for an EPS loss of -$0.39 on revenue of $497 million. Gross margin was 2.4% in the quarter, and the company expects that to rise to 5%-8% in the fourth quarter. The company reiterated its full-year shipment guidance of 1,200-1,300 megawatts.

Trina Solar posted an EPS loss of -$0.45 on revenue of $482 million. The consensus estimate called for an EPS loss of -$0.09 on revenue of $440 million. Gross margin was 10.8%, and the company expects gross margin of about 10% in the fourth quarter. The company lowered its full-year shipment guidance from 1,750-1,800 megawatts to 1,400 megawatts.

JA Solar posted an EPS loss of -$0.36 on revenue of $388 million. The consensus estimate called for an EPS loss of -$0.01 on revenue of $379 million. Gross margin was -4.3%, and the company did not provide an estimate for fourth quarter gross margin. The company reduced its full-year shipment guidance from 1,800 megawatts to 1,600 megawatts.

JinkoSolar posted an EPS loss of -$0.47 on revenue of $279 million. The consensus estimate called for EPS of $0.18 on revenue of $272 million. Gross margin was 3.7%, and the company did not provide an estimate for fourth quarter gross margin. Its project for fourth quarter revenue is $180-$210 million.

To declare today an unmitigated disaster for the Chinese solar makers may be understating the case. The companies that are predicting a higher gross margin the current quarter are probably dreaming, and the two companies that did not offer an estimate of fourth-quarter margins (JA Solar and JinkoSolar) undoubtedly face margins so low that they are embarrassed to discuss them.

There will be blood in the streets from these stocks again this morning. That does not mean that this is a particularly good buying opportunity, however. Failures and consolidations in the Chinese solar PV industry have got to be just around the corner. For the past 12 months, every one of these companies’ share price is down at least -70%.

In this morning’s pre-market, JinkoSolar shares are down the most, -12%, at $5.02 in a 52-week range of $4.55-$32.21. LDK shares are down more than -4.5%, at $2.70, in a 52-week range of $2.55-$14.97. Trina Solar is down nearly -4%, at $5.99, in a 52-week range of $5.28-$31.08. JA Solar is down more than -90%, to $1.38, a new 52-week low if it holds. JA Solar’s current 52-week range is $1.46-$8.57. Canadian Solar is down about -4.5%, at $2.10, also a potential nerw 52-week low. The company’s current range is $2.16-$16.79. Suntech shares have not moved yet this morning.

Paul Ausick

The unofficial closing bells put the DJIA down about 248 points to 11,547.23 (-2.11%), the NASDAQ fell more than 49 points (-1.92%) to 2,523.14, and the S&P 500 fell -1.86% or more than 22 points to 1,192.99.

There were several analyst upgrades and downgrades today, including Apple Inc. (NASDAQ: AAPL) reiterated as ‘buy’ with a $500 price target at Credit Suisse. Other ratings actions included DeVry, Inc. (NYSE: DV) cut to ‘underperform’ and ‘Bear of the Day’ at Zack’s; Morgan Stanley (NYSE: MS) raised to ‘buy’ at Argus; Qualcomm Inc. (NASDAQ: QCOM) reiterated as ‘buy’ with a $72 price target at Argus; Target Corp. (NYSE: TGT) cut to ‘neutral’ at JPMorgan; and Western Digital Corp. (NYSE: WDC) raised to ‘overweight’ at Barclays.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Hastings Entertainment Inc. (NASDAQ: HAST) was down more than -13%, at $1.65, after posting a new 52-week low of $1.55; Tech Data Corp. (NASDAQ: TECD) was down -0.9%, at $47.47, and Tyson Foods Inc. (NYSE: TSN) was up about 0.3% at $19.51. We took a closer look at Tech Data’s earnings earlier today.

After markets close today and before they re-open for tomorrow, there will be an avalanche of earnings reports. Perhaps the most closely watched will be Hewlett-Packard Co. (NYSE: HPQ) and a half dozen Chinese solar PV makers: JinkoSolar Holding Solar Co. Ltd. (NYSE: JKS), Trina Solar Ltd. (NYSE: TSL), Canadian Solar Inc. (NASDAQ: CSIQ), JA Solar Holdings Co. Ltd. (NASDAQ: JASO), LDK Solar Co. Ltd. (NYSE: LDK), and Suntech Power Holdings Co. Ltd. (NYSE: STP). Shares in all these solar makers are down today, as investors anticipate the bad news that’s coming.

Several other standouts from today are as follows…

LinkedIn Corp. (NASDAQ: LNKD) is down more than -4%, at $68.95. The company’s 180-day lock-up period ended today, adding another 24 million shares of the company available for sale. LinkedIn tied up another 56 million shares for an additional 90 days or the damage could have been worse.

Pharmasset, Inc. (NASDAQ: VRUS) is up nearly 85%, at $134.03, after hitting a new 52-week high of $135. The company has agreed to be acquired by Gilead Sciences Inc. (NASDAQ: GILD) for $11 billion.

Gilead Sciences, Inc. (NASDAQ: GILD) is down nearly -9.7%, at $36.02, after posting a new 52-week low of $34.45. Investors tend to believe that Gilead is paying too much for Pharmasset.

Focus Media Holding Ltd. (NASDAQ: FMCN) is down nearly -39%, at $15.56. The Chinese advertising company is the target of a report by short-selling firm Muddy Waters alleging that Focus Media has signififcantly overstated the number of screens in its LCD network.

Global Education and Technology Group Ltd. (NASDAQ: GEDU) is up more than 97%, at $10.60, after posting a new 52-week high of $10.70. The company is being acquired by Pearson plc, owner of the Financial Times newspaper and other media properties.

Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) is up more than 10%, at $55.02. The company received USDA approval for its eye drug Eylea.

Zillow, Inc. (NYSE: Z) is down more than -13%, at $23.52, after posting a new 52-week low of $22.55. There is no specific news about the company, but, like LinkedIn, a pile of shares will be available on the market when the company’s lock-up period ends in about another two months.

Stay tuned for Tuesday. In addition to the earnings reports we’ve mentioned, here’s a list of other noteworthy events (all times Eastern):

• 7:45 a.m. – International Council of Shopping Centers-Goldman Sachs retail sales report
• 8:30 a.m. – US third-quarter GDP report revisions
• 8:30 a.m. – BEA corporate profits report
• 2:00 p.m. – Federal Open Market Committee minutes released

Your email address

subscribe

terms and conditions

Paul Ausick