STRI Holdings (STRI) is hitting new 52 week lows this morning after the company lowered Q2 guidance.  The company now expects revenues in the range of $98 – $101 million vs the previous expectation for $104 – $110 million.  The lowered guidance is a result of lowered expectations for its solar business.   Non GAAP EPS is also expected to come in lower at $.30 – $.32 vs prior guidance of $.38 – $.42.

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Mr. Dennis L. Jilot, Chairman, President and Chief Executive Officer stated, "We are obviously very disappointed to have to lower our guidance this quarter, especially considering that our strong first quarter performance had continued through early June. Due to the uncertainty of incentive programs in Italy and Germany, which took longer to resolve than anticipated, lower solar module demand has resulted in excess inventory and overcapacity throughout the Solar supply chain. Late in the second quarter, these industry-wide conditions caused our customers to slow their build rates and reduce purchase orders issued to us. It is also important to note that the slowdown appears to be broad-based, rather than customer-specific."

The lowered guidance for STRI is nothing new for solar related stocks.  The entire industry has been slashing estimates due to the uncertainty related to the cuts in Germany and Italy.  After plummeting in May, solar stocks have finally begun to stabilize a bit but continue to search for a bottom to this correction.  As for STRI, it’s hitting a new 52 week low this morning on heavy volume and should be avoided for some time.  However, an intraday reversal to close in the upper half of the trading range would be a positive development and could signal there is significant support at current levels.