Evergreen Solar (ESLR) Announces Preliminary Results, Record Shipments

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07:19:00 pm on April 19, 2010

JA Solar (JASO) raised guidance about two weeks ago and Evergreen Solar (ESLR) is out with preliminary results tonight, but the two companies still aren’t in the same league.  ESLR is saying that 1st quarter shipments have increases to a new company record of about 35.4MW with revenues at about $78.5 million and an average selling price of $2.20/watt.  However, manufacturing costs remained about where they were last quarter which is disappointing for a company doing everything they can to cut costs.

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Assuming the company reports official results on May 4th that are consistent with tonight’s preliminary results, they’d be reporting revenues that are essentially flat sequentially, but about 50% greater than the year ago quarter.  The key though for ESLR has never been about revenues, it’s been about cutting costs and it appears they didn’t do it on the manufacturing side and won’t until they get operations up and running in China around the middle of the year. 

After their last earnings report I said “This is a company that needs a shakeup, probably in management.  The cost cutting clearly isn’t working and if they don’t make big improvements soon I think you’ll see them bought out at fire sale prices or bankrupt within a year.  The Massachusetts company is working to move assembly operations to China to cut costs further, but will it be too little too late?”  I still feel that way and I don’t think earnings this quarter is going to change that.  ESLR is a solar laggard that has NEVER posted a profitable year.. plain and simple.

Shares of ESLR are up about 7% in after hours trading and will try to get back above the 50 day moving average tomorrow.

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