Energy Business

Alternative Energy Watch: Hot and Not Solar Earnings; US Ends Loan Guarantee Programs for Alt Energy; BP Invests in Biofuel Maker (JASO, TSL, ENER, FSLR, SPWRA, ASTI, BP, VRNM)

Today’s alternative energy news compares earnings results at two solar PV makers, notes the end of US loan guarantees for alternative energy projects, and looks at another investment in alt energy from a major oil company.

Chinese solar maker JA Solar Holdings Co., Ltd. (NASDAQ: JASO) reported first quarter results yesterday. The company posted earnings per ADS of $0.41, better than analysts’ estimates of $0.32. Revenue rose 91% year-over-year, to $556.4 million, compared with estimates of $552 million. The company’s margins shrunk, however, from 23% a year ago to 17.3%, and there are concerns that margins will shrink further for the rest of this year.

Trina Solar Ltd. (NYSE: TSL) did not report earnings yesterday, but did lower its guidance for the quarter ended in March. Shipments are expected to fall from an earlier estimate of more than 351 megawatts to 320-322 megawatts. The company did predict that margins would be slightly better than expected, up from 30% to 32%-32.5%. For the full year, Trina reiterated shipment guidance of 1,750-1,800 megawatts, up from last year by about 66%-70%. Trina reports first quarter results on May 17th.

The really bad news in solar PV came from Energy Conversion Devices, Inc. (NASDAQ: ENER), which reported its fiscal third-quarter results yesterday. Revenue fell -70% from the same period a year ago, to $21.5 million compared with analysts’ estimates of $35.2 million. Excluding a one-time impairment charge of $223 million, the company posted an EPS loss of -$0.41, better than Street expectations for an EPS loss of -$0.48.

The bad news just kept rolling for the company though. It said that it plans to cut 300 jobs, about 20% of its workforce and that the company president has resigned. Interim CEO Jay Knoll, the company’s general counsel, noted that changes in European solar incentives had and will continue to have a serious impact on the company’s business.

Knoll is an interesting choice as interim CEO. He was general counsel for auto parts maker Collins & Aikman Corp. when that company filed for bankruptcy in 2005. Five of the company’s officers, not including Knoll, settled a fraud investigation by the SEC for more than $7.4 million. Most of the payment came from David Stockman, the company’s CEO and chairman, and one-time budget director for President Ronald Reagan.  Stockman was later cleared of all criminal charges.

If Knoll assumes a permanent role as the company’s CEO, then one might conclude that a bankruptcy filing would not be far off. If another CEO is brought on board, the company may decide to try to stick it out. This one is worth watching.

Energy Conversion Devices’ shares are up more than 2.5% in early trading, at $1.54, still near the bottom of the company’s 52-week range of $1.48-$7.15. That low was set yesterday.

The US Department of Energy has stopped taking loan guarantee applications for financing new alt energy projects. The DOE has issued guarantees of about $1.6 billion for 19 different projects so far, and has about $800 billion left to allocate to projects that can close guarantees and start construction by September 30th. Both First Solar, Inc. (NASDAQ: FSLR) and SunPower Corp. (NASDAQ: SPWRA) have received conditional guarantees totalling about $2.6 billion. Solar-panel maker Ascent Solar Technologies Inc. (NASDAQ: ASTI) withdrew an application last month.

Biofuel start-up Verdezyne, Inc. has closed another round of venture funding. The company did not specify the amount raised, but did say that it landed investments from BP plc (NYSE: BP) and Dutch biochemical firm DSM. The new funding is expected to help get Verdezyne through another two years of development, including the construction of two pilot plants to produce bioethanol and adipic acid, a polymer substitute.

BP purchased the biofuels portion of Verenium Corp. (NASDAQ: VRNM) last year for $98 million. The recent announcement by Total SA (NYSE: TOT) that it would acquire a 60% stake in SunPower could have started the ball rolling (again) for new investments by major energy companies in fledgling biofuels ventures.

Paul Ausick