Friday, October 16, 2009

UPDATE: "Solar companies defend accounting practices" (FSLR; SPWRA; STP)

Following up on yesterday's "U.S. solar firms' 3Q accounting may get hard look (FSLR; SPWRA; STP)", Reuters has some reaction from the companies:

* First Solar says follows standard accounting practices

* Sector expected to report best quarter of year

By Laura Isensee

LOS ANGELES, Oct 16 (Reuters) - U.S.-based First Solar Inc (FSLR.O) denied it was using aggressive accounting methods to support its earnings growth, despite concerns from some analysts that its cash flows were beginning lag profit levels.

"We report net income and net cash provided by operating activities in accordance with U.S. GAAP," the company said in an email, referring to the Generally Accepted Accounting Principles.

First Solar and other leading solar companies such as China's Suntech Power Holdings Co Ltd (STP.N) and California- based SunPower Corp (SPWRA.O) are expected to report their quarterly earnings in the coming weeks.

Those figures are expected to be their brightest earnings in a year since a global glut of solar panels and lack of financing has hurt the industry.

Yet some analysts have said cash flow at those companies has lagged behind reported profit in recent quarters, which could mean the companies are using aggressive accounting and may not be able to sustain their earnings.

"If that continues, your operating results look good, but your tangible cash flow is declining because you're not collecting on your revenues. That's a formula for disaster for any company," said Gordon Johnson, an analyst with Hapoalim Securities....MORE

Hugs and kisses all around. Previously on Blossom:

Oct. 5-Report: Solar Stocks’ Aggressive Accounting Raises Red Flags (FSLR; SPWRA; STP)