Earnings Season: Alternative Energy Stocks To Watch

by: Harris Roen

Some 44 companies that we follow in alternative energy have reported earnings in January 2013. Results have been all over the map, so it is important for alternative energy investors to know where to be cautious, and where the best potential profits are to be found. Below is a summary of selected earnings results from alternative energy companies that we track.

The Roen Financial Report tracks "pure-play" alternative energy companies in addition to companies that are actors in alternative energy, though they may also be involved in other business sectors.

For example, Google (NASDAQ:GOOG) is obviously not primarily an alternative energy company. They do however, understand that their whole business is based on the use of electricity. As a result, Google has taken a proactive approach to integrating clean energy in their electric consumption portfolio. Accordingly, Google has been an early adopter of wind generation and is a significant player in several major wind projects. For example, CNN recently reported on Google's $200 million investment in wind in Texas, which brings Google's wind portfolio up to $1 billion. Google is also seeking influence smart grid regulation, as reported on smartgridnews.com.

The Timken Company (NYSE:TKR) is also not a "pure play" company. It is covered by Roen because they design and manufacture gear drives used in wind turbines. Additionally, Timken's friction management and mechanical power transmission products are used to increase fuel efficiency in rail, automotive and heavy trucks.

In order to be a comprehensive source of information for alternative energy investors, we cast a wide net when it comes to covering alternative energy stocks. We also actively track "pure play" companies for investors interested in stocks with a more focused business model.

Date Company More Info
Linear Technology Corporation (NASDAQ:LLTC)
1/15 Earnings came in on target for this integrated circuit company, but EPS were down 16% for the quarter and down 3% year-over-year. The stock, however is trading at annual highs, up 13% for the quarter and 7% in 12 months. We consider LLTC stock overvalued at these levels. Conference call
1/16 Earnings slightly beat analyst estimates, coming in 22% higher than the previous quarter but still remaining flat year-over-year. The stock shot up over 5% in one day, and 7% in 10 days on the news. Press release
Xilinx, Inc. (NASDAQ:XLNX)
1/17 This smart grid company announced disappointing earnings, with revenues dropping 6% for the quarter, and both net income and earnings down double digits. Additionally, 2013 guidance dropped below analyst estimates. XLNX stock fell close to 25% on the news. Reuters article
Johnson Controls Inc. (NYSE:JCI)
1/18 EPS remain low for Johnson Controls, though earnings have bounced back up since last quarter. Sales remain flat, and profits have dropped slightly. The stock is down 8% for the year, but has gained 33% since its lows in August. Still, the stock is considered undervalued at current prices. Press release
General Electric Co. (NYSE:GE)
1/18 Revenues increased 8% for GE last quarter. Both earnings and net income were up double digits, though orders for wind turbines were down. The stock has had solid gains, up 17% for the year. Webcast
Rock-Tenn Co. (RKT)
1/22 EPS dropped 8% for the quarter, but this recycling company still beat analyst estimates by 6%. Sales have leveled off but remain strong, and the company retains excellent cash flow. We consider the stock undervalued at the current trading range in the mid to high $70s. Press release
Google, Inc. (GOOG)
1/22 Google came in with stronger than expected earnings, up 28% for the quarter and 15% greater than the same quarter last year. This means another in a long uninterrupted string of annual revenues increases for the company. The stock is up 7% since the announcement, and up 22% in one year. Press release
Cree, Inc. (NASDAQ:CREE)
1/22 Cree's stock price surged after a stronger than expected earnings report, beating analyst expectation by over 8%. Profits increased 15% for the quarter and 27% year-over-year. The stock traded up 22% in one day on historically high volume on the news. Earnings call transcript
Siemens AG (SI)
1/23 Siemens posted lackluster earnings, with revenues dropping 16% for the quarter and EPS down 8%. It plans to sell its Solar Thermal business and Water Technology unit. This is in addition to 1,100 job cuts in its energy division due to decreased economic activity in the European Union. Bloomberg article
1/23 This smart grid company issued a strong earnings report, with profits up 36% for the quarter and EPS more than doubling. The stock is up on the news, and has gained 29% in the past year. Press release
Hexcel Corp. (NYSE:HXL)
1/23 Revenues were flat and earnings went down slightly for Hexcel this quarter. Guidance from the company remains strong for 2013, with revenues projected to be between 4%-10% above 2012 levels. The stock is up 22% off its lows in August, but is still essentially flat for the year. Reuters article
Timken Company, The (TKR)
1/24 Even though Timken beat analysts estimates by almost 30%, earnings for the fourth quarter were still sluggish. Revenues, profits, and EPS all fell for the quarter and year. This power transmission company is expecting a 5% drop in sales for 2013. Press release
Corning Inc. (NYSE:GLW)
1/29 This silicon company took a big hit on net income this quarter, but EPS gained on rising profits. The stock has been bouncing around between the $11 to $14 price range, and is considered at fair value at current levels around $12/share. Press release

Disclosure: I am long GOOG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.