North Coast Solar Stocks

November 4, 2009

SolarWorld keeps 2009 outlook, Q3 weak

Filed under: FSLR — Tags: , , , , — Jason @ 8:20 am

Wed Nov 4, 2009 8:20am EST

* Confirms 2009 sales outlook of 1 bln eur

* Q3 EBIT 34.7 mln eur vs 38 mln eur estimate

* Company had to fend off 25 pct price slump

* Shares up 1.5 percent vs FTSE clean tech index up 0.8 pct

By Christoph Steitz

FRANKFURT, Nov 4 (Reuters) – SolarWorld on Wednesday reaffirmed a full-year sales target of 1 billion euros ($1.47 billion) despite cutting prices by a quarter and missing third-quarter operating earnings forecasts.

Germany’s No.3 solar company reported third-quarter sales at 232.5 million euros and earnings before interest and tax (EBIT) amounted at 34.7 million. Analysts in a Reuters poll on average expected sales of 270 million and core earnings of 38 million.

Overcapacity of solar cells and modules has led to massive price declines, bringing growth in the once-booming sector to a near standstill at a time when companies have huge difficulties finding funding for cash-intensive solar projects.

“We had to stave off a price fall of 25 percent,” SolarWorld Chief Executive Frank Asbeck, sometimes called the “Sonnenkoenig” (Sun King), told Reuters, adding that some of it was offset by cost cuts.

SolarWorld’s shares rose 1.5 percent by 1224 GMT, outperforming the FTSE clean tech index .FTET50, which gained 0.8 percent.

SolarWorld has survived the downturn better than its peers, countering massive price declines for cells and modules by making everything from components to panels.


But analysts have warned it was only a matter of time before the price slump would filter through to players that are active in more than one part of the solar value chain.

Larger Norwegian rival Renewable Energy Corporation ASA (REC) — which had sales of 6.480 billion Norwegian crowns ($1.11 billion) in the first nine months of 2009 — said last week overcapacity in the industry would continue into next year. It missed third-quarter forecasts.

Yet in some regions it spotted early signs of improved demand for modules, a slightly more optimistic view than U.S. bellwether First Solar (FSLR) gave last week.

The question is now whether SolarWorld will be able to meet its 1 billion euros sales target.

“This seems aggressive as it is based on record sales of 366 million euros in the fourth quarter,” SES Research analyst Karsten von Blumenthal wrote, keeping a “buy” rating.

Societe Generale analyst Didier Laurens, also with a “buy” rating on the stock, wrote that the company’s existing inventory should enable the group to meet its sales target.

Analysts in a Reuters poll expect on average full-year sales of 976 million euros.

(Additional reporting by Anneli Palmen in Duesseldorf)

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