American Eagle Outfitters Inc. (NYSE: AEO): Q4 Earnings Preview 2010

American Eagle Outfitters Inc. (NYSE: AEO) is scheduled to release its fourth-quarter earnings before the opening bell on Wednesday, March 9, 2011. Analysts, on average, expect the company to report earnings of 43 cents per share on revenue of $922.97 million. In the year ago quarter, the company reported earnings of 33 cents per share on revenue of $971.98 million.

American Eagle Outfitters, Inc. operates as an apparel and accessories retailer in the United States and Canada.

In the preceding third-quarter, the Pittsburgh, Pennsylvania-based company's net income was $33 million, or 17 cents a share, compared with a profit of $59.2 million, or 28 cents a share, in the comparable quarter last year. On an adjusted basis, the company earned 29 cents a share in the latest quarter. Revenue increased to $752 million, from $736 million. Analysts, on average, expected the company to report earnings of 29 cents per share on revenue of $748.91 million.

The apparel stores sector has been experiencing a period of recovery lately as consumer spending continues to strengthen. However, higher-end brands like American Eagle Outfitters Inc. have been hurt by customers shifting to lesser brands in search of lower price points.

Last month, the company said that total sales for the fourth quarter ended January 29, 2011 decreased 4 percent to $916 million from $956 million for the same period last year. Comparable store sales decreased 7 percent for the quarter, compared to a 5 percent increase for the same period last year. Revenue at stores open at least a year is a key indicator of a retailer's health, because it excludes the effects of stores that open or close during the year. January is typically retailers' slowest month of the year.

The company said that it expects fourth quarter earnings to be on the high end of the previously announced guidance of $0.41 to $0.43 per share.

Since opening its first stores outside North America in Dubai and Kuwait last year, American Eagle Outfitters has been steadily pursuing its international strategy. The company has additional agreements for stores in China, Hong Kong, and Israel, as well as plans for other countries. In December 2010, the company announced plans to open retail stores in Japan as part of its ongoing efforts to expand in international markets. The first store is slated to open in Tokyo's legendary Harajuku shopping district in the first half of 2012.

Full Disclosure: None.

Evergreen Solar Inc. (NASDAQ: ESLR): Q4 Earnings Preview 2010

Evergreen Solar Inc. (NASDAQ: ESLR) is scheduled to release its fourth quarter after the closing bell on Wednesday, March 9, 2011. Analysts, on average, expect the company to post a loss of 77 cents a share on revenue of $98.63 million. In the year ago quarter, the company posted a loss of $2.88 per share on revenue of $74.55 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. The technology significantly reduces the amount of silicon used in a solar panel. 

The firm has lost $54 million through the first nine months of 2010. The company has had warnings from Nasdaq over delisting, painful debt restructuring plans and numerous successive money losing quarters. 

In the preceding third-quarter, loss was $27.2 million, or 13 cents per share, compared to a loss of $82.7 million, or 40 cents per share, in the prior-year quarter. Revenue increased to $86.5 million from $77.7 million. Analysts, on average, expected the company to post a loss of 11 cents per share on revenue of $87.48 million.

The company recently announced that it had amended a key part of its recapitalization plan. The firm said that it lowered the conversion price on new 4 percent convertible subordinated additional cash notes due 2020, which the company is seeking to exchange for 4 percent senior convertible notes due 2013. The initial conversion price of the new notes has been cut from $6 to $4.35 per share, Evergreen said. The company also extended the deadline for the exchange offers from Jan. 31 to Feb. 9. The offers are a central component of Evergreen’s plan to substantially reduce its debt and interest expenses. 

The company faces significant headwinds due to start-up costs, capital expenditures and subsidy cuts in Germany, the world's largest market. The company generates bulk of its revenue from key European markets like Germany and Spain.

Also, Evergreen Solar has faced intense competition in the market for solar power products, particularly from Chinese manufacturers. The company is working to outsource its panel assembly operation from Devens, Mass., to China as a way to cut costs, and expects a new company-owned plant in China to be fully operational making solar wafers by the end of the year. The company said that it would close its Devens, Massachusetts factory and cut 800 jobs to preserve cash as its products face stiff competition from cheaper Chinese rivals. The facility, which began producing solar panels in 2008, will shut down by the end of the first quarter. The company said that it is "no longer economically feasible" to operate the manufacturing facility in a "high-cost market in a period of rapidly declining prices."

Evergreen will record non-cash charges in the fourth and first quarters of $340 million to write off the building and its equipment. It is also reviewing $150 million of prepayments associated with silicon contracts to determine whether additional charges are required.

Evergreen Chief Executive Michael El-Hillow recently said that increases in solar panel production in low-cost regions such as China combined with reductions in government subsidies in key European markets would pressure prices throughout this year. Evergreen's average selling prices dropped 10 percent in December. "The United States will continue to be at a disadvantage from a manufacturing standpoint," El-Hillow said in a statement.

On the bright side, the company is likely to benefit from geographically diversified contractual backlog, improving operating efficiencies, ongoing expansion programs and shifting a part of its manufacturing process to China. 

During the quarter in review, the company implemented the previously approved 1-for-6 reverse stock split.

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Suntech Power (NYSE: STP): Q4 Earnings Preview 2010

Suntech Power Holdings Co. (NYSE: STP), China's largest solar panel maker, is scheduled to release fourth-quarter earnings after the closing bell on Tuesday, March 8, 2011. Analysts, on average, expect the company to report earnings of 29 cents a share on revenue of $843.26 million. In the year ago period, the company reported earnings of 27 cents per share on revenue of $583.62 million.

Suntech Power Holdings Co. engages in the design, development, manufacture, and marketing of photovoltaic products worldwide and its products include monocrystalline and multicrystalline silicon PV cells; PV modules; and building-integrated photovoltaics products.

In the preceding third-quarter, the Wuxi, China-based company's net income was $33.1 million or $0.18 per ADS, compared with a profit of $29.79 million or $0.16 per ADS in the year-ago quarter. Revenue surged 57.2% to $743.67 million from $473.11 million. Analysts, on average, expected a profit of $0.23 per ADS on revenue of $713.08 million.

In December, the company said that it expected to generate revenues of between $2.78 billion and $2.83 billion in fiscal 2010 by shipping more than 1.5GW of solar products. This represents a 64% year-over-year revenue growth. Suntech Power's consolidated gross margin for fiscal 2010 is expected to be about 17%, and operating margin is projected to be about 6.5%. The company also expected to achieve installed cell and module production capacity of 1.8GW and installed wafer capacity of 500MW by the end of 2010."Over the next 12 months, we intend to expand internal wafer capacity to 25% to 50% of our total cell and module capacity. This should enable us to significantly reduce wafer cost, and improve profitability. Going forward, we also plan to leverage Suntech's global R&D resources to drive innovation and efficiency improvements in ingot and wafer manufacturing processes," Chief Executive Dr. Zhengrong Shi said in November.

Early in Februaury, Suntech Power said that prices for its solar panels rose in the fourth quarter from the third quarter. The company also said ythat it expects those prices to remain steady through the first half of 2011. Prices in Europe, the company's largest market, climbed slightly on both a euro-basis and because of gains in the currency there, said Steven Chan, Suntech America's president.

For fiscal 2011, the company anticipates full-year revenues in a range of $3.4 billion to $3.6 billion after shipping at least 2.2GW of solar products. Earnings per American Depositary Share for the year are projected to be in the range of $1.40 to $1.60.

The company is rapidly expanding its presence in the United States. The US solar market is growing significantly and is expected to become the world's second-largest this year, with an estimated annual growth of 42 percent by 2020. Suntech, which opened its first U.S. panel manufacturing site in Goodyear, Arizona last year, sold 65 MW of panels in North America in December, topping the 55 MW it sold in the region during all of 2009. The company is targeting sales of 500 MW in North America this year, double the 250 MW is sold in 2010.

In January, US President Barack Obama in his State of the Union address called for 80 percent of the nation's electricity to come from clean sources by 2035. Meanwhile, Senator Bernie Sanders submitted a bill to congress titled the "10 Million Solar Roofs and 10 Million Gallons of Solar Hot Water Act". This bill is expected to spur alternative energy growth and create green jobs.

2010 continued the significant growth of the solar market with new markets in China and the USA advancing their demand for solar panels. Solar industry as a whole has benefited from continued strong demand thanks to growing awareness about global warming, skyrocketing oil prices, cheap financing and technological advances. Companies involved in the production of semiconductors used in solar panels have enjoyed a positive quarter. Many have experienced rising shipments over the last few quarters, resulting in a sequence of record quarters. The world is becoming increasingly environmentally conscious. Both commercial and private demand for solar power is rising. Solar options are becoming more attractive as more governments provide better options for buildings producing solar power to feed into and out of the grid as required.

Thanks to better cost advantages, Chinese solar module maker have grabbed more market share from their international competitors. Local solar companies have also benefited from China's well-developed supply chain, cheap electricity, supportive policies and even low environmental standards. More than 90 percent of domestic Chinese manufacturers sell their products overseas currently, especially in Europe, where the solar electricity industry is more mature.

Full Disclosure: None.