North Coast Solar Stocks

June 25, 2009

First Solar: More Trouble As Phoenix Solar Issues Warning

Filed under: FSLR — Tags: , , , , — Jason @ 2:06 pm

Posted by Eric Savitz
barrons.com

There’s fresh evidence of continued weakness in the solar sector.

Phoenix Solar, a German solar module company that ranks among the largest customers for First Solar (FSLR), today advised investors not to rely on its previous 2009 guidance for EBIT, earnings before interest and taxes, of 31 million Euros.

“The reason for this assessment is the continuing decline in prices, particularly for solar modules, resulting in downward pressure on margins, buying resistance on the part of customers, and an increased devaluation requirement for current inventories,” Phoenix Solar said in a statement. “Until now, based on various signals, the Board of Directors had expected that price declines had reached their lowest point and that earning situation would recover. These expectations were not confirmed.”

The company said it still expects positive EBIT for the year, but that it will only issue detailed guidance when prices have stabilized. The company is keeping its revenue guidance of 520 million Euros.

Hapoalim Securities analyst Gordon Johnson asserts in a research note that Phoenix is actually First Solar’s single largest customer. “We strongly recommend our readers Sell,” he writes.

In German trading, Phoenix Solar shares fell 5.75 Euros, or 14.3%, to 34.45.

FSLR is down$11.57, or 6.8%, to $159.62.

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