3 Stocks With Lowered Guidance Ahead of Earnings Season

by: Vantage Point Investor

As earnings season has its unofficial kick off next week with Alcoa's (NYSE:AA) quarterly results on July 11th, we highlight lowered guidance from several companies, putting their respective shares under pressure this past Monday.

Shares of SatCon Technology (SATC) are traded down by more than 20% following the company's disappointing guidance. The company stated that it expects second quarter 2011 revenue to be between $45-47 mln, below analyst consensus, compared with its previous guidance of $50-60 mln. The company attributed the lowered guidance to the continued impact of changes in government incentives in its higher margin markets in Europe, as well as delays on a few projects that have been pushed into the third quarter.

The company also lowered its gross margin estimate for the quarter, which is now expected to be between 7-11%, below its previously announced guidance of 17-20%. SATC lists Advanced Energy (NASDAQ:AEIS), Siemens (SI), SMA Solar Technology (OTCPK:SMTGF), as some of its main competitors in its most recent 10-K.

Shares of Advanced Energy (AEIS) traded more than 11% lower following its lowered second quarter guidance. The company reported that it expects second quarter revenue to be between $137-140 mln, below the range of $148-160 mln it projected on May 2, 2011, and earnings at the low end of, or slightly lower than its previous guidance of $0.36-0.44. Both revised figures were below analyst consensus.

The company stated that

The performance of our renewables business drove our lower than expected second quarter revenue, while our thin film business performed in-line with our expectations. Our results were primarily impacted by changing solar market conditions driven by panel price declines, short lead-times for components, and permitting and financing delays... Additionally, changing incentive programs in certain regions, coupled with increasing competition, affected the quarter and continue to be ongoing industry dynamics.

In its most recent 10-K, AEIS lists MKS Instruments (NASDAQ:MKSI), as one competitor with their power conversion products for thin film processing, and SMA Solar, SatCon, Power-One (NASDAQ:PWER), and Siemens as companies that offer products that compete with their solar inverters.

Shares of thinly traded Radvision (NASDAQ:RVSN) traded lower following its revised second quarter guidance. RVSN now expects to report GAAP earnings of ($0.41)-(0.44) vs previous guidance of ~($0.17), and revenues for the second quarter of ~$18.0-18.5 mln, below previous guidance of ~$22 mln. The company noted that the revised second quarter outlook is primarily the result of lower than anticipated revenues in the company’s Video Business Unit (VBU), which are expected to be ~$14.5-15.0 mln. The company also noted that second quarter revenues from its Technology Business Unit (TBU) are expected to be ~$3.5 mln, which is also below its original forecast.

The company stated that:

While we knew the second quarter would be challenging because of the anticipated substantial drop in Cisco (NASDAQ:CSCO) revenues from the second quarter last year, the quarter was more difficult than expected. While our revenues in EMEA, APAC and CALA continued to grow year over year, revenues in our VBU in North America did not meet our plan. Our Company is currently in the midst of becoming an end-to-end video conferencing provider but getting full traction is taking longer than originally expected."

In a recent SEC filing, RVSN noted that some of its principal competitors to VBU currently include Polycom (NASDAQ:PLCM), TANDBERG (owned by Cisco), and LifeSize (owned by Logitech (NASDAQ:LOGI)).

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.