TAKING THE PULSE: Solar-power product makers are ramping up efforts to gain market share in growing and emerging markets such as the U.S., Asia, the Middle East and South America to offset soft demand in Europe. The move comes as governments in Europe, the world's primary solar-power market, have cut subsidies that supported the sector for years. Falling solar cell and module prices amid expanding production in China and uncertainty in Europe have driven shares down for many solar companies so far this year.
COMPANIES TO WATCH:
First Solar Inc. (FSLR) reports Aug. 4
Wall Street Expectations: U.S.-based First Solar is expected to report earnings of 92 cents a share on revenue of $584 million, according to analysts polled by Thomson Reuters. A year earlier, the company posted a profit of $1.84 on revenue of $588 million.
Key Issues: In June, First Solar obtained $4.5 billion in conditional loan guarantees from the U.S. Department of Energy to finance the construction of three large solar farms in California. The guarantees will support a key part of the company's strategy to gain market share and create demand for its products in the fast-growing U.S. solar market. Investment company Auriga said the loans provide visibility to revenue expectations through 2013. The company also has been pushing into less-penetrated markets such as Australia, China and the Middle East.
SunPower Corp. (SPWRA) reports Aug. 9
Wall Street Expectations: U.S.-based SunPower is projected to report a loss of 18 cents a share on $583 million in revenue. The company last year reported a loss of 6 cents, or a profit of 15 cents excluding a tax expense and other impacts, on revenue of $384 million.
Key Issues: In July, SunPower predicted a second-quarter loss of 19 cents to 20 cents, down at least 9 cents from its June forecast. Adjusted gross margins are expected between 12% and 13%, down 3 to 4 percentage points from the prior view.
Like First Solar, SunPower has expanded into project development to gain market share and create demand for its products in the U.S. and other countries. In June, French oil giant Total SA (TOT, FP.FR) acquired a 60% stake in the company in a deal that provides SunPower with up to $1 billion of credit support over the next five years.
Suntech Power Holdings Co. (STP) reporting date to be announced
Wall Street Expectations: The producer of photovoltaic panels is expected to report earnings of 17 cents per American depositary share on revenue of $802 million. Suntech posted a loss of 97 cents last year on revenue of $625 million. Those results included $1 a share in restructuring charges and write-downs.
Key Issues: Suntech, which has grown to become the world's largest solar-panel maker, has been working to expand into other markets amid uncertain demand in Europe. The company may be able to expand its footprint in its home country, following the Chinese government's announcement of a new solar-power tariff of CNY1, or 16 cents, a kilowatt-hour, in a long-awaited move to spur demand there. Suntech has aggressively expanded into Asia, the Middle East and Africa.
LDK Solar Co. (LDK) reporting date to be announced
Wall Street Expectations: The Chinese maker of multicrystalline solar wafers and solar panels is expected to report a profit of 44 cents per ADS on revenue of $716 million. Last year, LDK reported a 36-cent profit on $565 million in sales.
Key Issues: LDK has faced increasing scrutiny after it was named in separate July reports by credit-rating companies Moody's Investors Service and Fitch Ratings that raised questions about accounting and corporate governance at several publicly traded Chinese companies. Following the reports, LDK said a board member who chaired its audit committee, Louis Tung-jung Hsieh, had resigned.
In June, LDK issued a second-quarter revenue target that missed analysts' expectations, although gross margins were projected to expand. The company has said it may repurchase up to $110 million of its shares in an effort to boost their value. Like Suntech, LDK is likely to benefit from growing solar demand in China, following a government announcement of a new solar-power tariff.
Trina Solar Ltd. (TSL) reporting date to be announced
Wall Street Expectations: The Chinese solar-panel maker is expected to report a profit of 80 cents per ADS on revenue of $652 million. Last year, Trina reported a profit of 52 cents per ADS on revenue of $370.8 million.
Key Issues: Trina is one of several Chinese companies that have shuffled board members amid greater scrutiny into accounting practices. In July, Peter Mak resigned as a Trina board member and as head of the solar company's audit committee. Mak also resigned from his job as chief financial officer at Chinese power company A-Power Energy Generation Systems Ltd (APWR), after that company's independent auditor quit following a dispute over the need for a forensic accounting company to review certain business transactions. Trina is likely to benefit from the new Chinese solar-power tariff.
Yingli Green Energy Holding Co. (YGE) reporting date to be announced
Wall Street Expectations: Analysts surveyed by Thomson Reuters expected a profit of 29 cents per ADS on revenue of $609 million. A year ago, Yingli reported a profit of 21 cents, or 25 cents excluding derivatives and other impacts, on revenue of $398.1 million. The prior-year figures are based on currency conversions at that time.
Key Issues: Like Suntech, Yingli Green has been expanding into the U.S., Southeast Asia, South America and the Middle East, although the company has said Europe would remain its most important market. Yingli is likely to benefit from China's new solar-power tariff.
(The Thomson Reuters estimates and year-earlier results may not be comparable because of one-time and other adjustments.)
-By Cassandra Sweet and John Kell, Dow Jones Newswires; 212-416-2480; email@example.com