By Mark Boslet
Solar sales continue to surge in advance of Germany's cut in its feed-in tariff. But stocks did not follow suit, as if anticipating difficult times ahead.
Several of the industry's largest manufacturers offered insight into their businesses this week - and the news was generally favorable. Sales rose sharply over the past three months, even if profits sometimes did not.
Among the companies with the strongest gains was SunPower (SPWRA) of San Jose, where quarterly revenue rose 64 percent, helped by the company acquisition of SunRay. The company said Tuesday it wasn't able to meet demand for its products. However, earnings fell short of expectations.
"We were sold out in the first quarter," said CEO Tom Werner. "We remain sold out in the second quarter."
SunPower was to be outdone. Chinese solar king Suntech Power Holdings (STP) surprised investors with a quarterly revenue forecast of close to $590 million, well ahead of the $542 million analysts expected. And JA Solar Holdings (JASO), another Chinese polysilicon cell maker, topped expectations for its first quarter, with sales up 17 percent. The company foresaw more upbeat times and raised its outlook for the year.
LDK Solar (LDK) and ReneSola (SOL), both of China, and Q-Cells (QCLSF.PK) of Germany also unveiled impressive sales increases, with previously struggling ReneSola posting quarterly sales that almost doubled.
The wave of favorable reports suggests that Germany remains a strong buyer of solar equipment in anticipation of the July cuts. Sales also were strong in the United States, France and Italy.
SunPower's Werner predicted panel prices would fall by as much as 20 percent this year, but that demand across the world would remain steady.
SunPower on Tuesday also announced its Oasis "power plant in a box," a prepackaged solar module assembled into large solar farms. The modules will reduce plant costs up to 25 percent and simplify construction, said Werner. Oasis is expected in the market in early 2011.
Despite the upbeat sales figures, solar stocks turned in a dull performance on Tuesday. After rallying on Monday, when Suntech and LDK released their financial reports, many drifted lower. SunPower shares fell 4 percent after its earnings were released.
Disclosure: No positions