The solar sector looks set for a bloody day after Deutsche Bank and Citibank issue negative comments on the industry highlighted by the bombshell that Germany subsidy cuts might be even steeper than originally forecast. JA Solar (JASO) -3.9%, LDK Solar (LDK) -2.5%, and JinkoSolar (JKS) -2.6% have joined the cavalcade of solar names in the red in premarket trading.Solar panel companies are expected to post another quarter of weaker results as a glut of manufacturers in the sector continues to weigh on panel prices.
In addition to oversupply from Asia, the industry faces weakened demand from Europe, the world's largest market for solar products, as governments cut back on subsidies for solar installation. These difficulties have sent shares of solar panel companies plummeting 50% to 75% over the last year and triggered a wave of solar company bankruptcies, including the high-profile collapse of Solyndra Inc. Meanwhile, U.S. trade authorities are investigating domestic manufacturers' complaints over possible dumping of solar panels on the U.S. market by Chinese makers.You can also check previous stocks to buy reports- Right Here
COMPANIES TO WATCH
SunPower Corp. (SPWR) - reports Feb. 16
Wall Street Expectations: U.S.-based SunPower is expected to report a loss of 5 cents a share on revenue of $665 million, according to analysts polled by Thomson Reuters. A year earlier, the company posted a profit of $1.44 a share, or $1.36 a share excluding stock-based compensation and other items, on revenue of $937.1 million.
In addition to oversupply from Asia, the industry faces weakened demand from Europe, the world's largest market for solar products, as governments cut back on subsidies for solar installation. These difficulties have sent shares of solar panel companies plummeting 50% to 75% over the last year and triggered a wave of solar company bankruptcies, including the high-profile collapse of Solyndra Inc. Meanwhile, U.S. trade authorities are investigating domestic manufacturers' complaints over possible dumping of solar panels on the U.S. market by Chinese makers.You can also check previous stocks to buy reports- Right Here
COMPANIES TO WATCH
SunPower Corp. (SPWR) - reports Feb. 16
Wall Street Expectations: U.S.-based SunPower is expected to report a loss of 5 cents a share on revenue of $665 million, according to analysts polled by Thomson Reuters. A year earlier, the company posted a profit of $1.44 a share, or $1.36 a share excluding stock-based compensation and other items, on revenue of $937.1 million.
Key Issues: The solar-panel maker has taken steps to keep up with a rapidly changing market, in November unveiling plans for a broader reorganization that included a shuffling of executives. SunPower has said it remains focused on expanding in the U.S. and Europe, as well as South Africa and the Middle East, where its biggest shareholder, French oil company Total S.A. (TOT, F.TOT), has extensive operations. Total boosted its stake in SunPower to 66% in December as SunPower also agreed to acquire Total's solar power subsidiary in a deal that expands SunPower's presence in large-scale projects.
Trina Solar Ltd. (TSL) - reports Feb. 23
Wall Street Expectations: Analysts expect the Chinese solar-panel maker to post a loss of 39 cents per ADS on revenue of $372 million. A year earlier, Trina reported a profit of $1.87 an ADS on revenue of $641.8 million.
Key Issues: Trina reported a weaker bottom line for the past two quarters as rising costs have more than offset an increase in shipments, and tightened financing conditions weighed on customers' projects in Europe. Trina's gross margin narrowed sharply in the third quarter due to an inventory writedown, and the company sees margins weakening again for the fourth quarter. Bank of America said in a recent note that the outlook for the solar industry is "still tough" though it said Trina doesn't show the same level of losses as its weaker counterparts, noting the company's ability to reduce costs and grow in new markets like the U.S. and China.
Yingli Green Energy Holding Co. (YGE) - report expected around March 1
Wall Street Expectations: Analysts predict a loss of 20 cents per American depositary share on revenue of $441 million. A year earlier, the company recorded a profit of 57 cents a share, excluding write-downs, share-based compensation and other items, on revenue of $616.1 million.
Key Issues: The Chinese solar-products maker swung to a loss in the third quarter, ending a streak of soaring profits, as lower average selling prices slowed the company's revenue growth. However, Yingli noted its third-quarter revenue shortfall was partially offset by increased photovoltaics modules shipments. In November, the company trimmed its full-year forecast for solar-panel shipments due in part to depressed demand and oversupply.
First Solar Inc. (FSLR) - reporting date to be announced
Wall Street Expectations: U.S.-based First Solar is expected to report a profit of $1.54 a share on revenue of $781 million. A year earlier, the company reported a profit of $1.80 a share on revenue of $609.8 million.
Key Issues: First Solar ousted its chief executive in October and announced a major restructuring in December as part of a new effort to compete against conventional energy generation. The company's interim chief executive, Michael Ahearn, said this is a better long-term strategy than competing against low-priced Chinese competitors in European markets that rely on government incentives. Ahearn said the company will cut spending and production this year and expand into new markets. In December, the company agreed to sell one of its large California solar farms to MidAmerican Energy Holdings Co. in a deal that underscores the fast growth and profitability of U.S. solar farms. First Solar said last week that a deal involving the sale of a different California solar farm to Exelon Corp. (EXC) hit a snag, due to a delay in resolving a construction permit issue that has delayed the payout of a federal loan for the project.
Suntech Power Holdings Co. (STP) - reporting date to be announced
Wall Street Expectations: The producer of photovoltaic panels is expected to swing to a loss of 35 cents per ADS on revenue of $555 million. A year earlier, Suntech reported a profit of $2.02 an ADS, which included a $250 million non-cash increase in the fair value of the Global Solar Fund's investments in projects, and revenue of $945.1 million.
Key Issues: The China-based solar-panel manufacturer has accelerated its efforts to make production more efficient, but sharply higher expenses and a steep foreign exchange loss pushed Suntech into the red in the third quarter. The company, which again cut its full-year revenue and shipment guidance in November, has said it expects excess capacity to fuel strong competition and consolidation among solar companies over the next few quarters. Last week, Suntech said it is partnering with U.S. manufacturer and chemical producer DuPont Co. (DD) to help increase the supply of photovoltaic materials and technologies for the solar energy market.
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