Energy Conversion Devices Shows Risks in Alternative Energy

Energy Conversion Devices (ENER-NASDAQ): The company reported a net loss of $2.9 million (or $0.07 per share) on revenues of $22.9 million in the second quarter of fiscal 2007.  We could discuss estimates, but there is no point.

Its CEO Robert Stempel said, "While we are not in the practice of providing guidance, I want to update an operating goal that we had established regarding sustainable profitability. We are on track with a number of our businesses, including our United Solar Ovonic business, but we do not at this time expect to achieve sustainable profitability by the end of this fiscal year as previously projected. This is in large part due to the fact that it is taking longer than we originally expected to secure additional funding opportunities for our emerging technologies. We remain firmly committed to sustainable profitability and will be pursuing funding and restructuring alternatives to achieve our goal in the near term."

Needless to say, this isn’t the sort of thing that alternative energy traders like to read.  Many of these names have been lingering around since before 2000 and most are still unprofitable.  With the recent rush of public Chinese companies that have come public as Profitable solar players, these American alternative energy better get their act together.  ENERshares are down over 10% at $31.75 on last look, and that is after a 2.5% drop to $35.50 ahead of earnings; its 52-week trading range is $29.03 to $56.00 and its market cap is $1.4 Billion as of the close.  ENER has been trading since before 1994, and while it has been much higher this used to trade well under $10.00 not that long ago.

Jon C. Ogg
February 8, 2007