Solar Stock Earnings Still Rough (JASO, SOL, FSLR, LDK)

With all the stimulus money in the U.S. supposedly heading toward alternative energy…. with all the boost from Chinese credits for solar…. with all the greenhouse gases and carbon emission regulation coming…. and with every nation wanting less dependence on foreign energy…. It is amazing how awful the earnings solar companies reported.  Sure there are some winners out there, but the reports from JA Solar Holdings Co., Ltd. (NASDAQ: JASO) and ReneSola Ltd. (NYSE: SOL) have shown again this morning how unexciting the earnings and expectations are for the sector after seeing nearly 50% drops in revenues.  This follows a somewhat disappointing report from industry leader First Solar, Inc. (NASDAQ: FSLR) and is ahead of the LDK Solar Co. Ltd. (NYSE: LDK) earnings report after the close of trading today.

JA Solar Holdings Co., Ltd. (NASDAQ: JASO) missed earnings at -$0.18 EPS vs. consensus of -$0.06, although that included some items.  Revenue fell by over 50% to $88 million, although that is above the estimates of $77.6 million.

ReneSola Ltd. (NYSE: SOL) posted a Q2 loss of $3.6 million or -$0.03 EPS as revenue fell over 50% to $82.6 million from Q2-2008. A year ago, its profit was $23.3 million.  Thomson Reuters had estimates at -$0.06 EPS on $90.2 million in revenues.

The key difference between First Solar, Inc. (NASDAQ: FSLR) and these other stocks is that First Solar is U.S.-based.  It is also one of the most established solar players globally. Another difference is that First Solar beat earnings estimates handily, but warned of pressure coming from competition and then from rebating in Germany.

The pressure is on for LDK Solar Co., Ltd. (NYSE: LDK) today after the close for its earnings.  Thomson Reuters is expecting -$0.91 EPS and $236.09 million in revenues.  As far as how that compares, the June-2008 earnings were a positive report at $0.41 EPS and revenues were roughly $441.7 million. LDK’s stock was right around $40.00 after reporting its Q2-2008 earnings, yet the stock is trading around $11.00 today.

A notion we have continued to foster was that this earnings season for the calendar Q2-2009 would separate the men from the boys in the solar sector.  Unfortunately, it seems that there are more boys than men.  We have joked for some time that solar stocks act more and more like leveraged moves on big directional changes of prices of black gold in the oil patch than they do the next major source of electricity in the world.  That seems to be looking like more and more of the case.

JON C. OGG
AUGUST 12, 2009