North Coast Solar Stocks

November 9, 2009

Energy Conversion posts second straight loss, shrs dip

Filed under: ENER, FSLR — Tags: , , , , , — Jason @ 1:17 pm

Mon Nov 9, 2009 1:17pm EST

* Q1 shr loss $0.28 vs EPS of $0.27 last yr

* Q1 sales more than halve, way below Wall St view

* Sees price declines, sequentially flat shipments in Q2

* Says prior FY rev outlook no longer applicable

* Shares down 4 pct

By Adveith Nair

BANGALORE, Nov 9 (Reuters) – Energy Conversion Devices Inc (ENER) reported its second straight quarterly loss, with sales coming in below estimates as demand for its solar products remained soft, and warned that prices would continue to fall.

On a conference call with analysts, the company said average selling prices, down 13 percent in the fourth quarter, would continue to decline in the December quarter.

“Our current estimate is we think high single digits to just around double digit decline would be appropriate,” a company executive said.

Like others in the solar industry, the Rochester Hills, Michigan-based company has been hurt by a dearth of financing and a global oversupply of solar panels that sent prices on solar power products tumbling.

ECD, which reported five consecutive profitable quarters before two back-to-back quarterly losses, makes lightweight, flexible solar laminates for rooftops and buildings that convert sunlight into electricity.

The company also indicated that visibility remained poor.

“At this time, our project business is uneven with large discreet orders where the shipments and timing of revenue recognition are difficult to precisely forecast. As a result, our prior full year revenue production is no longer applicable,” Chief Financial Officer Harry Zike said on the call.

The company had earlier forecast 2010 revenue to rise 10 percent to 15 percent.

Raymond James analyst Pavel Molchanov said while the quarter was not as awful as it might have been, it was still nothing to write home about.

In particular, there was still a lack of visibility on when building integrated photovoltaic market conditions will improve, he said.

“In the first quarter, new construction and reroofing projects continued to be slow, negatively impacting sales through our traditional building-materials channel,” Chief Executive Mark Morelli said in a statement.

Given soft BIPV demand, Molchanov lowered his 2010 revenue view by 21 percent to about $261 million, or down 18 percent from 2009.

“Revenue fell for the third consecutive quarter, with product sales reaching their lowest levels since two years earlier. Manufacturing utilization levels remain depressed in the face of a weak demand environment,” Molchanov said.

Earlier this year, ECD had said it would slow expansion plans and cut production to bring supplies in line with weak demand.

For the latest first quarter, the company reported a net loss of 28 cents a share, compared with a profit of 27 cents a share, last year.

Sales more than halved to $42.9 million. Solar product and project sales for the quarter were $36.1 million, compared with $89.5 million last year, and down nearly 22 percent sequentially.

This comes after larger rival and industry bellwether First Solar Inc (FSLR) also reported quarterly sales far below Wall Street view, and gave an outlook that showed competition was hurting prices, dashing hopes for a sector rebound.

ECD shares were down 44 cents at $11.05 in afternoon trade on Monday. The stock is so far down more than 70 percent from a November 2008 year-low.

(Reporting by Adveith Nair in Bangalore; Editing by Pradeep Kurup and Jarshad Kakkrakandy)

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