North Coast Solar Stocks

April 30, 2009

Evergreen Solar posts 1st-qtr loss, shares dive

Filed under: ESLR — Tags: , , , , , — Jason @ 5:44 pm

Thu Apr 30, 2009 5:44pm EDT

* Net loss of 40 cents per share

* Second-quarter production will be below capacity

* Subcontracting some production to China’s Jiawei Solar

* Stock down 13.6 percent after hours

By Nichola Groom

LOS ANGELES, April 30 (Reuters) – Evergreen Solar Inc (ESLR) reported a quarterly net loss on Thursday and said second-quarter production would be below targets as the economic downturn and weak credit markets have depressed demand for solar power, sending shares down percent.

Evergreen also said it would subcontract some of its wafer manufacturing to China’s Jiawei Solar (Wuhan) Co. It had previously said it was looking into subcontracting some manufacturing to save on capital costs.

The first-quarter net loss was $64.3 million, or 40 cents per share, compared with a loss of $25,000, or break-even per share, a year ago.

The results included one-time charges of $43.9 million, mostly for writing down a loan receivable and related interest in French silicon maker Silicium de Provence, or Silpro.

Earlier this month, Silpro entered a procedure similar to Chapter 11 bankruptcy in the United States.

Excluding those charges, Reuters Estimates said the company lost 9 cents per share, in line with Wall Street analysts’ average estimate.

Like many in the solar industry, Evergreen has been hurt by the weak demand for solar panels that has lead to an oversupply in the market and falling prices.

Evergreen said that while it could meet its second-quarter production target of about 30 megawatts (MW), sales will likely be between 20 MW and 25 MW due to the soft economy.

Webush Morgan analyst Al Kaschalk said the second-quarter forecast was less than he had expected.

Compared with the fourth quarter, Evergreen’s average selling prices were down nearly 8 percent, the company said.

Revenue was $55.8 million compared with $22.9 million last year, but gross margin was 1.2 percent compared with 33.6 percent a year ago due to lower prices and a decline in fees from its Sovello joint venture with Germany’s Q-Cells and Norway’s Renewable Energy Corp.

The company ended the quarter with about $56.9 million in cash and cash equivalents. It will need much of that capital later this year, however, to complete its production facilities and pay down debt, Chief Financial Officer Michael El-Hillow said on a conference call with analysts.

To help satisfy its capital needs, the company said it will tap a $100 million mixed shelf that it filed with U.S. securities regulators earlier this month.

“Since worldwide economic conditions have not improved, our liquidity has been impacted over the last few months and will continue to be impacted over the next few months,” El-Hillow said.

Evergreen shares fell 13.6 percent in extended trade to $2.10 after rising 11 percent to close at $2.43 on the Nasdaq earlier in the day. The stock had lost about 80 percent of its value since hitting a 52-week high of $12.64 last June.

(Reporting by Nichola Groom; Editing by Phil Berlowitz and Gunna Dickson)

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