Evergreen Solar (ESLR) reported a narrower quarterly loss late Monday, helped by lower production costs and higher shipments. Evergreen shares rose some 4.5% in morning trading to 70 cents per share.

The company reported that its second-quarter net loss shrank to $3.3 million, or 2 cents per share, from $20.6 million, or 11 cents per share, in the year-ago period. While some reported the company's loss was much smaller than Wall Street's estimated 11 cents-per-share loss, others found the comparison difficult due to the many items included in the reported figure.

For its second quarter that ended July 3, the U.S. photovoltaic solar maker reported its revenue rose 7.7% sequentially, or 24% year-over-year, to $84.5 million, beating expectations of $79.6 million. Shipments rose to 39.8 megawatts of product from 35.4 megawatts in the first quarter.

The company's solar panel manufacturing costs dropped 5% to $1.94 per watt from $2.04 in the first quarter. But the average selling price declined 7.7% to $2.04 per watt in the second quarter, from $2.21 per watt in the first quarter, mostly due to the weaker euro. The majority of Evergreen's sales were in Germany, Reuters reported, as companies rushed to take advantage of subsidies ahead of cuts there.

"Operationally, our team is executing strongly to plan in both Devens [Massachusetts] and Wuhan [China]," said Chairman, President and CEO Richard Feldt. "Our financial position is stronger," he added, referring to the recent bond issue. "Demand for Evergreen's panels continues to be robust into the third quarter. In this environment, we are planning to produce about 45 megawatts for the quarter, including our initial ramp toward 25-megawatt-per-quarter capacity from Wuhan."

Many of Evergreen's larger competitors are profitable and trade far from the penny-stock range. Improving margins and reducing costs while increasing capacity is a step in the right direction, however, the company still has a lot of catching up to do. Meanwhile, the sector will also have to contend with cuts to incentives in Germany and a possible weaker 2011. Despite today's share spike, many remain cautious about Evergreen Solar's prospects.

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kenneth

How can Evergreen (or any "green" manufacturer, for that matter) lose money? With all the government subsidies being heaped on the industry, there must be something seriously wrong here. If a company can not manufacture and sell its products at a price sufficiently higher than it costs them, so as to allow a profit for its shareholders, it should simply fold up shop and go away.

August 03 2010 at 1:23 PM Report abuse +1 rate up rate down Reply