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Not a bad earnings report out of Suntech Power (NYSE:STP) Wednesday. The company took a forex hit of about $30 million and when you take that out, the company just about matched the analyst estimate of .35/share. The company reported a .34/share gain minus the forex hit on revenues of $877 which were a bit above the estimate for $863. Gross margins hung in there at 19% which was just slightly below last quarter’s 19.5% and above the year ago quarter of 16.2%.

"The first quarter of 2011 was a solid quarter that demonstrated the resilience of Suntech’s business model under challenging market conditions," said Dr. Zhengrong Shi, Chairman and CEO. "Despite a slight sequential decline in our shipments related to policy uncertainty in Italy, a long winter in Germany and first quarter seasonality, we improved our gross margin from the fourth quarter and continued to diversify our sales across global markets. These outcomes reflect our ongoing efforts to enhance our competitiveness, mitigate policy risk, and position Suntech to increase our share in high-growth emerging markets. In particular, we were pleased to see greater demand in the Chinese solar market during the first quarter."

Here are some additional highlights of comments made by CEO Zhengrong Shi.

- Recently acquired facility fully integrated increasing annual wafer capacity to 1GW which will expand to 1.2GW by the end of the year.

- Expects decrease in production costs with more in house production

- Expanded cell and module capacity to 2.2GW

Looking ahead to results for this quarter, the company expects low single digit growth of PV shipments and the same gross margins compared to Q1. For the full year they are reiterating their shipment guidance of 2.2GW. However, due to pricing pressure, they are revising their revenue guidance down to $3.3 – $3.5 billion (although that’s within the analyst estimate for $3.38 billion).

As we’re beginning to see in solar stocks, traders are beginning to bid up the less than stellar earnings news which is an indication we may be near a bottom in solar stocks. We saw it with Hanwha Solar (HSOL) and saw it with Suntech Power yesterday. In my opinion, it’s time to begin putting solar stocks on your watchlist. It’s too soon just yet, but perhaps in a few weeks it will be time to pull the trigger on these beaten down green stocks. There is an exception. I’d be a buyer of MEMC Electronics (WFR) right here.