Thursday, May 8, 2008

Blowout Quarter: Energy Conversion Devices (ENER)

Back in February we said:
Is FSLR going to buy ENER? I'm seeing (and hearing) that ENER would be attractive to a couple companies, for a couple different reasons. Hmmm...

If there's anything to the speculation the price just went up 21% (pre-market).
From the press release:

Energy Conversion Devices Reports Net Income of $0.17 Per Share on Revenues of $70 Million for Third Quarter Fiscal 2008
- Company Reaches Profitability
- Solar Gross Margin Exceeds 30 Percent
- Internal Funding for Next 120MW Expansion

Energy Conversion Devices, Inc. (ECD) (Nasdaq: ENER), the leading global manufacturer of thin-film flexible solar laminate products for the building integrated and commercial rooftop markets, today announced financial results for the third quarter and nine-month period ended March 31, 2008.

Total consolidated revenues for the quarter were $70 million, up 24 percent from second quarter revenues of $56.4 million, and 155 percent higher than third quarter fiscal 2007 revenues of $27.4 million. Solar product sales were $64.9 million, a 31 percent sequential increase and a 193 percent increase over the prior-year quarter.

Net income for the third quarter was $7.0 million, or $0.17 per share, compared to a net loss of $5.4 million, or $0.14 per share, in the second quarter of fiscal 2008, and a net loss of $6.9 million, or $0.17 per share, in the year-ago period. Third quarter results include preproduction costs of approximately $751,000 and restructuring charges of $2.4 million, representing $0.08 per share in the aggregate.

Gross margin on product sales in the solar business was 30.7 percent in the third quarter, compared with 19.2 percent in the second quarter. The gross margin improvement was driven by better factory utilization and yield, and favorable customer/product mix....MORE

I'm curious what Lazard's thinking is now. From our April 12 post:

Analyst Sees 100%+ Upside In Many Solar Stocks (ENER; ESLR; FSLR; SPWR; STP)

I've been holding this link from 24/7 Wall Street since March 25. I wanted to see if Mr. Shrestha's timing was as good as his competition's.

Lazard Capital Markets' Sanjay Shrestha, who covers alternative energy and infrastructure for the firm, has come out and maintained his Buy ratings on many key solar stocks his morning. The catalyst is ahead of Photon International annual Photovoltaic Technology Show next week in Munich, Germany. Here are the targets on several stocks:

  • Energy Conversion Devices, Inc. (NASDAQ: ENER) maintained BUY with $26.57 current price, target price is $40.00.

Closing prices April 11 and percentage move since 3-25:

ENER---$31.00 up 16.67%
ESLR---$10.36 up 23.48%
FSLR---$268.30 up 28.06%
SPWR---$$87.77 up 28.62%
STP----$44.39 up 28.85 %

Some solid 18 day moves, especially considering the date of the 24/7 post was already two weeks after the Mar. 10 market lows. We like Lazard (and Cowen).
In this post "Solar: Cowen & Co. Analysts Are Demi-Gods" we said:
Both Lazard and Cowen have made some very timely calls on First Solar.

Energy Conversion Devices shares rise on upbeat analyst note

Cowen & Co. analyst Rob Stone, in an analyst note, said the company now produces 144-watt laminates as opposed to its earlier 136-watt laminates -- and it does so without increased manufacturing costs.

Since the average selling price of the laminates is based on watts, the improved efficiency increases both the company's revenue and its gross margin, said Stone, who has an "Outperform" rating on the shares.

The analyst also said he concurs with the company's projection that it would become profitable in the quarter ending in June.

Besides solar laminates, Energy Conversion Devices also makes nickel hydride batteries and develops phase-change memory technology.

Shares rose $2.63, or 7.9 percent, to $36.