Wednesday, February 29, 2012

Abound Solar Shuts Plant, Fires 180; First Solar is Dead Money (FSLR)

First up, Bloomberg:
Abound Solar Shutters Plant, Raising Specter of Solyndra Failure
Abound Solar Inc., which received a $400 million U.S. loan guarantee to build two factories, shut down production and fired 180 people after panel prices fell by half last year.

Abound stopped making its first-generation solar panels and will refit its manufacturing lines to produce more efficient products, the Loveland, Colorado-based company said yesterday in a statement.

The move is a response to the same forces that drove Solyndra LLC into bankruptcy after it received a $535 million loan guarantee from the same U.S. Energy Department program, said Pavel Molchanov, an analyst at Raymond James & Associates Inc. in Houston.

“Abound is facing the same headwinds -- cheap crystalline silicon from China -- that made Solyndra a political football,” Molchanov said today in an interview. “I think they made the right decision to conserve cash and focus on improving efficiency so they can ramp up when they’re ready.”

The company expects to resume full production by year-end with cadmium-telluride panels that will be able to convert 12.5 percent to 13 percent of the energy in sunlight into electricity. Its current products have conversion efficiency rates of 10.5 percent....MORE 
And from TheStreet:
Why First Solar Is a Worthless Stock
First Solar(FSLR) shares aren't going to zero, but the stock is worthless. 

The solar company has left investors with way too many questions and too few answers and is dead money in 2012 as the company continues to lay out a vague long-term plan for 2013 to 2015.

Solar has always been a better trade than investment, and the action in First Solar in 2012 is a typical sign of that maxim: Shares rallied to as high as $50 earlier this year, or by 35%, after falling by 70% last year. If shares were oversold they were then quickly overbought and after Wednesday morning's 10% drop, shares are now slightly negative in 2012 trading.
If solar remains good for a trade from time to time, it remains a pass based on 2012 fundamentals which imply profitless years for the Chinese solar companies even as shipments grow, and a year of transition for First Solar.

First Solar may now be back at square one in terms of 2012 trading, but it's not back at square one in terms of either its short-term or long-term outlook. The company seemingly cleared the decks in its December 2011 guidance, after ousting former CEO Rob Gillette and bringing Chairman Michael Ahearn back in as interim CEO. But things now look even worse, or as Stifel analyst Jeff Osborne wrote, a "bleaker outlook" than just two months ago.

"We did not get a sense that the company is firmly on the path to navigate the current challenging environment," Stifel's analyst wrote.

And go figure: Without a permanent CEO in place, First Solar said it will soon unveil a three-year strategic plan that should show investors where it is going and how it will succeed. How can First Solar be cementing a three-year plan that it will unveil in May when it is still conducting a search for a CEO?...MORE