Evergreen Solar, Inc., is scheduled to report December 2009 quarter
(Q4 2009) results on Monday, February 8, 2010. In the last four
quarters ending September 2009, the company underperformed the market
by huge margins. The company remained in red in the last four quarters.
Evergreen
Solar develops, manufactures and markets solar panels, utilizing its
proprietary String Ribbon technology. The company sells its solar
panels using domestic and international distributors, system
integrators, project developers and other resellers. It primarily
operates in the US, Germany and Korea.
In the third
quarter, the company shipped a record amount of product due to the
continued successful ramp of its Devens facility. Shipments during the
quarter increased to 31.3 megawatts, an increase of 35% over the second
quarter of 23.2 megawatts. In general, demand was holding firm in the
face of challenging macroeconomic conditions around the world. Activity
in Germany and other markets was fairly robust as customers moved to
take full advantage of the then feed and tariff incentives before
anticipated rate decreases.
Analysts' estimates for the
quarter ending December 2009 range from a low of -$0.17 to a high of
-$0.03, compared to a consensus estimate of -$0.09. The consensus EPS
forecast has remained flat over the past week to past two months at
-$0.09. However, EPS decreased over the past three months from -$0.06
to -$0.09.
Near stagnant state in EPS estimates is
attributable to the lack of meaningful action in the market prospects.
In fact demand for the company's shipments is estimated to have petered
out in the fourth quarter. However, margins could have increased due to
declining operating costs. Manufacturing costs were $2.24 per watt for
the third quarter versus $2.70 for the second quarter, representing a
17% improvement. Manufacturing costs are estimated to have improved
substantially in the fourth quarter as well. Declining manufacturing
costs are attributable to both declining input costs (wafer cost for
the third quarter was about $0.75 per watt versus $0.85 per watt for
the second quarter) and gains from learning curve. However, the
positive impact of declining manufacturing costs would have been
partially offset by declining selling prices. Net on net, the company
is expected to book EPS loss of $0.07 in the fourth quarter on revenue
of $74 million.
If long-term demand for panels
manufactured in the US significantly increases, the company will be
well positioned to quickly reintroduce panel assembly once again at
Devens.
The stock closed Friday at $1.44, compared to
the 52 week range of $1.00 and $2.96. In the last one year the share
price has lost more than 34.8%. The company's revenue could support a
price in excess of $1.6 in the next two quarters.
