North Coast Solar Stocks

August 6, 2009

First Solar down on competition, exec share sales (OFFICIAL)-UPDATE

Filed under: CSIQ, FSLR, JASO, LDK, SPWR, STP, TSL, YGE — Tags: , , , , , — Jason @ 2:13 pm

Thu Aug 6, 2009 2:13pm EDT

* First Solar stock falls about 5 pct

* Market expects aggressive price moves from China

* First Solar executives report share sales

LOS ANGELES, Aug 4 (Reuters) – Shares of First Solar Inc (FSLR) fell almost 5 percent on Tuesday as investors fretted about share sales by company executives and aggressive pricing from Chinese rivals.

The stock closed down $7.60 at $147.98 on the Nasdaq after earlier falling to $146.86, while the majority of U.S.-listed solar stocks were up for most of the day. Shares of Chinese competitor Canadian Solar (CSIQ), which is slated to report results on Thursday, and Suntech Power Holdings Co (STP), closed up about 1 percent and more than 5 percent, respectively.

Last Thursday, industry bellwether First Solar reported blowout earnings but announced it would offer rebates to defend its position in the German market — its largest market — against sharp price cuts from competitors. The company’s stock has dropped 14 percent since that announcement.

First Solar has weathered the global recession better than many of its peers because its cadmium telluride panels are cheaper to produce than the silicon-based panels that dominate the market. However, a dearth of financing for renewable energy projects has contributed to a global glut of solar panels that has driven prices on silicon-based panels closer to those of First Solar’s, chipping away at its competitive edge.

ThinkEquity analyst Colin Rusch said that investors are still looking for more details on the Tempe, Arizona company’s new rebate program.

“Investors are expecting some pretty aggressive pricing numbers from the Chinese companies, and First Solar has indicated it will sell at a discount to key low-cost Asian competitors,” Rusch said in an interview.

“Investors are not getting real clarity on (First Solar’s) rebate program and there are expectations that the Chinese are going to come out and be very aggressive about pricing,” Rusch added.

In addition to Canadian Solar and Suntech, Chinese solar companies JA Solar Holdings Co Ltd (JASO), Trina Solar Ltd (TSL), Yingli Green Energy Holding Co Ltd (YGE) and LDK Solar Co Ltd (LDK) are all scheduled to report quarterly results this month.

Meanwhile, Kaufman Bros. analyst Theodore O’Neill attributed the drop in First Solar’s stock to company executives’ selling shares. First Solar announced the sales in filings with the U.S. Securities and Exchange Commission late on Monday.

According to the filings, Chief Executive Mike Ahearn was issued 5,000 shares, Chief Financial Officer Jens Meyerhoff was issued 3,500 shares, and President Bruce Sohn was issued 4,000 shares.

Related to those vestings, the company withheld 1,997 of Ahearn’s shares at $173.55 each, 1,435 of Meyerhoff’s shares at $173.55 each, and 1,388 of Sohn’s shares at $173.55 each to cover the executives’ taxes on the restricted stock.

First Solar spokeswoman Lisa Morse said the withholdings by the company were compulsory for the executives.

But O’Neill said that the “conventional thinking is that if the people who run the business are selling stock, that must be a bad thing.”

O’Neill added that if Chinese solar companies were aggressively pricing panels in Europe, it would drive down the stock of First Solar’s U.S. rivals like Sunpower Corp (SPWRA, SPWRB), which closed down about half a percent on Tuesday.

(Reporting by Laura Isensee, editing by Bernard Orr)

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