Satcon Technology (SATC) Pressured On EPS Miss, Weak Guidance

Another solar company earnings report and the song remains the same.  EPS hit with soft guidance due to European subsidy cuts.  Satcon Technology (SATC) is issuing an earnings report right along the lines of other solar companies with revenues about inline with estimates at $46 million, but a with significant miss on the EPS side posting a loss of .18/share vs the estimate for a .12/share loss. 

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CEO Steve Rhoades commented:  “The market environment in the second quarter was challenging. Despite the strength of North America, the market conditions in Europe and Asia had negative effects on our overall performance.  In addition, we incurred one-time charges associated with inventory, restructuring, and the strategic decision to accelerate product development. Although these measures have resulted in a higher than expected operating loss, they have effectively strengthened our ability to achieve our revenue and cost targets by the end of 2011.”

On the bright said, it also sees improvement in the 2nd half of the year.  It should be noted that Satcon also gets 80% of revenue from North America which has been a bright spot.  The company sees weak numbers again this quarter forecasting revenues in the range of $45 – $52 million vs the estimate for $62 million, but believes it can meet expectations by the end of the year due to upside potential in Europe in Asia as well as continuing strength in North America. 

I think Satcon is a company to put on the radar for a possible purchase in the coming weeks.  This is a company that is expected to be profitable for the first time in its history next year, so as it gets closer to a buck a share, offers tremendous upside potential in the coming years.  Shares are trading down over 10% in after hours trading.

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