Solar stocks were under some pressure today after Evergreen Solar (ESLR) and Renesola (SOL) sounded the caution alarm as average selling prices and demand falls on inventory increases and subsidy uncertainties.  Renesola reported earnings that missed on the EPS side, but beat on the revenue side.  The stock was down nearly 10% at one point and tested some key support around the $8 level earlier this morning.

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The company reported an EPS of .49 vs the analyst estimate for .58 on revenues of $328 million vs the analyst estimate of $323 million in revenue.  Despite the miss on the EPS side it still represented a 250% increase over the year ago quarter.  Don’t expect that kind of quarter over quarter growth to continue though.

Here are some highlights of comments made by CEO Xianshou Li:

– seeing sharp decline in module ASP’s
– wafer pricing holding steady
– made significant gains in reducing polysilicon costs
– on target to increasing annual poly capacity to 3500MT
– cautious outlook in Europe due to policy changes in Italy

Looking ahead, the company is cautious and expects solar shipments in the range of 330 – 350MW, revenues in the range of $280 – $300 million and gross margins in the range of 25 – 27%. 

Traders didn’t initially like the report this morning and sold the stock due to the EPS miss and cautious guidance.  However, the stock recovered, holding key support around that $8 level.