Tuesday, February 2, 2010

Evergreen Solar Inc. (NASDAQ: ESLR): Q4 Earnings Preview 2009

Evergreen Solar Inc. (NASDAQ: ESLR) is scheduled to release its fiscal fourth-quarter 2009 financial results after the closing bell on Monday, February 8, 2009. Analysts, on average, expect the company to report a narrower loss of 9 cents a share on revenue of $74 million. In the year ago period, the solar firm posted a loss of 32 cents per share on revenue of $44.19 million.
Evergreen Solar, Inc. engages in the development, manufacture, and marketing of solar power products primarily in the United States and Europe. It utilizes its proprietary String Ribbon technology process to produce multi-crystalline silicon wafers by growing thin strips of multi-crystalline silicon that are then cut into wafers.
Last year, solar industry suffered heavily as turmoil in the credit market forced financial players to abandon U.S. solar energy projects. The 2008 collapse of top solar financier Lehman Brothers and the freeze-up in the global credit markets drove nearly all banks to halt funding for major new solar projects, forcing the makers of systems that turn sunlight into electricity to cut prices for their products and sending their stocks crashing. The problems of solar companies had been further compounded by an oversupply of polysilicon, a material used in solar panels. Moreover heightened competition from Chinese solar companies too has impacted the US solar industry.
In November, the Marlborough, Massachusetts based-company posted a third quarter loss of $82.4 million or $0.40 per share, compared to a loss of $24.6 million or $0.19 per share in the year-ago period. Quarterly revenue surged to $77.7 million, compared to $22.1 million in last year period. Analysts, on average, expected the company to report a loss of $0.08 per share on revenue of $73.86 million.
Though shipments jumped 35% to to 31.3 megawatts from prior quarter's 23.2 megawatts, the company expects demand to moderate during the latter part of the fourth quarter and well into the first, reflecting industry seasonality.
Globally, solar industry depends upon government subsidies and incentives and support to remain competitive. However, recent developments suggest that subsidies will inevitably be reduced or phased out. Evergreen Solar sells bulk of its panels in key European markets like Germany and Spain, where generous federal subsidies ensured high electricity rates for solar energy system. According to media reports, the German government is planning to cut solar subsidies for new roof and open-field sites from April by 16 percent to 17 percent. Additional cuts to the subsidies will be made from 2011 if solar projects amount to more than 3,000 megawatts, and even more if they total more than 3,500 megawatts. Already France in January slashed the tariffs for electricity produced from rooftop solar panels by 24 percent. Spain too has taken similar steps.
However, the industry as a whole is likely to benefit from growing attention to global warming, skyrocketing oil prices, cheap financing and technological advances. At the Copenhagen Summit held in December 2009, the five major polluters of the world agreed to take action to reduce CO2 aggressively, with $100B per year pledged to help developing nations adopt green energy technology to cut greenhouse gas. Meanwhile, the US, China, Brazil and India continue to invest heavily in wind and solar energy with China's $454B in the next 5 year period as the most aggressive one. As part of the stimulus bill signed last year, the federal government approved around $60 billion in loan guarantee authority and $30 billion in energy grants for renewable energy and transmission companies. Congress has also granted a 30% renewable-investment tax credit to help expand the development of alternative sources of energy.
In terms of stock performance, Evergreen Solar shares have lost almost 33 percent over the past year.

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire