China Sunergy (CSUN) Misses Estimates But Surges 10%

Solar stocks continue their ambiguous ways with many stocks in the industry rising after reporting poor results, while others (such as ENER) get crushed.  However, for the most part, it appears that most of the bad news is priced into solar stocks and the situation with ENER was an exception.  The market is overbought up here, but on any significant pull back I think the time to get into solars for the long term is here.  I believe the bottom of several days ago is the bottom or darn close for solars.

Anyway, regarding China Sunergy (CSUN) earnings, the company missed both earnings and revenue estimates this morning, but is up 10% today.  The company reported an EPS loss of $0.42/share, 6 cents worse than estimates on revenues of $43 million (about 7 million shy of estimates).  On a non GAAP basis which includes one time charges, the EPS loss was much narrower at .16/share. 

“China Sunergy has faced the same unprecedented and volatile environment as many of our peers across the solar sector, as a result of the ongoing global financial crisis. The severe pressure we initially experienced in September have persisted, as reflected by our lower than anticipated financial results including our negative gross margin and a higher than expected net loss. In the past months, we have experienced cancellation or postponement of orders, even as we reduced the selling price of our products significantly in response to market conditions. Although our recent financial results have been drastically impacted, we shipped 45 percent more solar cells in 2008 than in 2007 and remained cash flow positive at an operational level. We expect conditions to remain difficult in the coming quarter, however we retain our belief and confidence that our advanced solar cell offerings, coupled with our R&D, engineering and manufacturing capabilities will ensure the Company fulfills its long-term potential.”

The company believes good demand exists for 09 but will be limited by economic conditions so will proceed cautiously on supply procurement and capital expenditure.  They expect 15% – 20% margins for the 2nd half of 09 and for the full year expects shipments of 150MW to 200 MW.

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