Sector Snap: Solar energy companies slide
NEW YORK (AP) — Shares of solar companies tumbled for a second day Wednesday after First Solar Inc.'s weak outlook for the current quarter fell short of analyst expectations.
The company also said Tuesday that it would wait until its April 9 analyst day to release its outlook for the year. Analysts said the delay worried investors.
Based in Tempe, Ariz., First Solar is one of the largest solar panel manufacturers in the world, and it also develops and builds large solar farms that generate electricity sold to utilities.
The broader solar industry has struggled in recent years due to a steep price drop for solar panels. Global demand for panels languished in Europe and elsewhere, even as manufacturing capacity soared.
First Solar's large-scale U.S. projects have supported its business, said Raymond James analyst Pavel Molchanov, who rates the company's shares "Underperform." But as those projects are completed and begin to disappear, he expects a decline in profitability, he said in a Wednesday note.
The April meeting could help investors better track the company's prospects for the next few years as it shifts away from the large U.S. projects and toward work in emerging markets in the Middle East, Asia and Latin America, said Citi analyst Shahriar Pourreza, who rates shares at "Buy."
First Solar shares dropped $4.40, or 14 percent, to $26.96 in afternoon trading. Still, they remain far from their 52-week low of $11.43. Over the past several months, the stock has posted steady gains, more than doubling since the end of May.
First Solar's announcement came a day after competitor Trina Solar Ltd.'s reported results disappointed, which also sent solar stocks reeling.
Trina Solar stock fell 18 cents, or 4.3 percent, to $4.02 in Wednesday afternoon trading, after losing 5 percent of their value the day before.
Among the other solar companies, shares of Yingli Green Energy Holding Co. dropped 16 cents, or 6 percent, to $2.53; Suntech Power Holdings Co. fell 7 cents, or 5.6 percent, to $1.36; LDK Solar Co. dropped 11 cents, or 6 percent, to $1.69; and SunPower Corp. lost 7 cents to $11.62.