Suntech Power Earnings Miss Hits Solar Names Early (STP, FSLR, SOLF, LDK)

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Suntech Power (NYSE: STP) missed earnings this morning and shares are paying the price.  The solar player posted $0.34 EPS, $0.02 worse than the First Call consensus of $0.36 EPS.  Its revenues rose 82.5% year over year to $397.5 million, but the consensus estimate there was $419.6 million.

To top it off, Suntech issued lower guidance for Q1-2008: it sees revenues of $370 to $380 million versus $455.04 million consensus; for Fiscal 2008 it sees revenues if $1.9 to $2.1 Billion versus $2.24 Billion consensus.

Suntech Power (NYSE: STP) is trading down a monster 17% at $37.99 in early pre-market trading; its 52-week trading range is $31.41 to $90.00 and its market cap was almost $7 Billion before this drop.  Solar stocks tend to trade in tandem with each other, and this is taking at least somewhat of a toll on many other names in the sector:

  • First Solar (NASSDAQ: FSLR) down 2.6% pre-market at $206.40;
  • Solarfun Power Holdings Co. Ltd. (NASDAQ: SOLF) down 5% at $15.45;
  • LDK Solar (NYSE: LDK) -4.8% at $33.00 on very thin volume.

For whatever it is worth, there have been other instances where these stocks get hit on a piece of news from another player, only to recover.  But an earnings miss with the multiples that these stocks carry is just not very well received regardless of much these have come off of their highs.

Jon C. Ogg
February 20, 2008