Intelligent Energy

Clouds form over solar share prices

Clouds form over solar share prices

Posting in Energy

It's an equal opportunity stock price decline, as even Chinese manufacturers like Suntech are reeling. Westinghouse Solar hits penny stock level, drawing a de-listing warning from NASDAQ.

Stormy days for solar investors.

Plunging solar prices may be good for consumers, but they continue to make more grim news for the solar industry: Solar share prices are getting hammered as profit margins decline.

As Greentech Media spotted earlier this week, two of the planet’s largest solar companies, First Solar, and Suntech, were trading at various historic lows.

While China shoulders a hefty share of the blame for free falling panel prices – a host of factors enable Chinese manufacturers to sell at low rates – the stock malaise is an equal opportunity affliction. NYSE-traded Suntech is Chinese.

On Monday of this week, the stock price at Suntech, the world’s largest panel maker, dropped 26.41 percent to $1.70, “an historic low,” GTM noted.

Suntech has wilted even though, as GTM notes, it was on track to meet its full year guidance of 2.2 gigawatts of sale, as of its last quarterly report. At the time it scaled back its revenue projections for the year by $100 million, to around $3.3 billion, as the firm foresaw an acceleration of price declines by a “high teens” percentage through the third quarter, following a second quarter decline of seven percent. Gross margins were thin at 4.1 percent.

The same day that Suntech shares collapsed, Tempe, Ariz.-based First Solar’s, share price fell 8.4 percent to $57.90, its lowest since April 2007, GTM pointed out. (It has crept back up, closing yesterday at $64.73).

At least Suntech and First Solar aren’t penny stocks like Westinghouse Solar, which was trading at 72 cents at the time of this writing. Earlier this week, NASDAQ sent the company a de-listing warning because it had traded below a dollar for 30 consecutive days. NASDAQ will either kick Westinghouse off the stock exchange if it don’t rise consistently above $1.00 by April 2, or will grant another 180 days to beat a buck.

The depressed stock prices reflect the same trading environment that has forced U.S. solar firms Solyndra, Evergreen and SpectraWatt into bankruptcy, and that prompted recent layoffs and closures at Norwegian solar pioneer REC.

Photo: John Kerstholt/Wikimedia

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Mark Halper

Contributing Editor

Mark Halper has written for TIME, Fortune, Financial Times, the UK's Independent on Sunday, Forbes, New York Times, Wired, Variety and The Guardian. He is based in Bristol, U.K. Follow him on Twitter. Disclosure