North Coast Solar Stocks

February 13, 2008

First Solar Flares

Filed under: FSLR — Tags: , , , , — Jason @ 4:25 pm

Carl Gutierrez, 02.13.08, 4:25 PM ET

Investors renewed their love affair with the solar industry on Wednesday after First Solar posted impressive quarterly results that reflected improved manufacturing efficiency.

First Solar’s shares soared 27.0%, or $47.67, to $223.23, in afternoon trading, and other makers of solar-energy equipment also advanced.

For the fourth quarter the Phoenix-based solar-panel maker reported a 686.3% increase in earnings, to $62.9 million, or 77 cents per share, from $8.0 million, or 12 cents per share, reported a year earlier.

First Solar’s earnings came on the back of a near-quadrupling of sales, to $200.8 million, from the $52.7 million, in 2006.

The results were far better than Wall Street’s predictions. The consensus among analysts was for earnings of 53 cents per share and sales of $179.6 million. “They were fantastic,” said Adam Hinckley, an analyst at Oppenheimer, “no one was expecting anything this quarter.”

Hinckley said the key to the quarter’s success were lower-than-expected manufacturing costs and better volumes. The company spent $1.12 per watt of generating capacity to make its panels, down from $1.19 a year ago. “It really demonstrates their leadership within the industry,” Hinckley said.

Although the increased efficiency was specific to First Solar, the entire industry benefited in the stock market on Wednesday. Shares of SunPower were up 11.4%, or $8.12, to $79.42, Evergreen Solar jumped $11.3%, or $1.14, to $11.25, LDK Solar increased 7.2%, or $2.41, to $35.96 and Suntech Power Holdings leaped 13.4%, or $6.15, to $52.07.

Hinckley said that First Solar’s success has gotten people exciting about the sector again. After phenomenal increases through 2007, solar stocks fell hard as investors took their profits amidst broader economic uncertainty. “The demand trends for the industry are as robust as ever,” Hinckley said, adding “an event like this acts as a catalyst for the group.”

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