Evergreen Solar (ESLR) Reports Mixed Results

Evergreen Solar (ESLR) reported uninspiring results again this quarter as profitability remains elusive.  The company upped guidance a few weeks ago, which gave the stock some life, but it’s back towards all time lows.  There are some highlights in the quarter, but as I’ve said in the past, unless this company can cut costs significantly they aren’t going anywhere.  The strategy to “go somewhere” is to go elsewhere for manufacturing.. China.  There is some good news on that front.

The company beat analyst estimates on the revenue side, posting $78.5 million for the quarter, but the .12/share loss was steeper than the .09/share loss analysts expected.  Again, they didn’t do a good job of cutting costs as total manufacturing cost decreased just .01 per watt over the previous quarter.  However, they are making progress on the China manufacturing operations and have produced the first wafers.

====> Click Here For Your FREE Evergreen Solar Analysis

CEO Richard Feldt commented on the China operations: “Our Devens facility is performing strongly and our China expansion effort is proceeding as planned. As a result of the recently completed convertible note financing, we are in a very strong position to rapidly execute on the expansion strategy we have outlined for our operations in China.  We have continued to hire key personnel in China and we expect production equipment to be delivered and installed on time which will allow us to begin shipping product by mid this year.”

Looking ahead, the company expects shipments to increase slightly again this quarter to between 37 – 38MW (they shipped 35.4MW last quarter) 

Shares aren’t moving much after hours, down just 1%.  The all time low for ESLR is 1.08 which it hit in Feb and March.  If it can hold that level and clear the 4/20 high of 1.27, that would be quite bullish.  I don’t see the stock moving much until it can prove its China operations are working.

Leave a Reply

Your email address will not be published. Required fields are marked *