Lazard Capital solar analyst Sanjay Shrestha today raised his ratings on both Suntech (STP) and LDK Solar (LDK). He ups Suntech to Buy from Hold; for LDK he goes to Hold from Sell.

Shrestha writes today that ASPs in the solar sector “are beginning to stabilize.” He notes that limited access to capital throughout the solar value chain has caused widespread cancellations or decreases in capacity expansion plans. For instance, he says that polysilicon capacity expansion plans have been reduced by 8,700 metric tons in 2008, 22,000 metrics tons in 2009 and 16,000 metric tons for 2010; Shrestha says there have likewise been reductions in capacity expansion plans in wafer, cell and module production.

The Lazard analyst notes that the solar sector’s Q4 earnings season kicks off next week with a report from MEMC Electronics Materials (WFR) on Jan. 22. He cautions that pressured ASPs will cause significant gross margin deterioration for most players, and he cautions that first half and 2009 guidance “will likely be bleak,” given economic concerns and tight lending standards.

Read the rest of this post

Suntech (STP) tonight said that seven of its employees were hurt on Nov. 28 in an accident in its module production facilities in Wuxi, China. The solar company said the injured have been hospitalized. The company did not give any details on the nature of the incident.

However, earlier this afternoon–hours before the announcement–research firm Wedge Partners reported in a research note that one employee was killed (Update: the company denies there were any fatalities) and seven injured in an explosion on a cell-diffusion line, a processing step in PV cell manufacturing that uses high temperatures and combustible gases. The Wedge Partners note said that the seven injured workers suffered severe burns.

Read the rest of this post

Suntech (STP) shares are trading dramatically lower–and dragging down the rest of the already battered solar sector–on an extremely weak outlook for Q4 results.

For Q3, the company posted revenue of $594.4 million and non-GAAP profits of 36 cents a share. That beat the Street estimate of $571.7 million at the top line, but fell short of Street estimate of 42 cents at the bottom line.

But what really matters here is the outlook. For Q4, the company now sees revenue of $345 million to $360 million, dramatically below the Street consensus of $614.78 million. Suntech said it expects to be “marginally” profitable or break even in the quarter. The Street had expected 43 cents.

Read the rest of this post

As far as I can tell, the sun is operating normally.

But you might think otherwise, judging from this week’s action in solar stocks. The sector, which suffered considerable losses yesterday, today went into freefall, with many names in the sector suffering losses of more than 10 percent. Exactly why investors decided to bail on the stocks today is unclear, but there are a number of factors that appear to be contributing to the current solar scare.

Lehman analyst Vishal Shah wrote a note on the solar sector that, in general, was quite bullish and, in fact, repeated his recommendations on First Solar (FSLR), SunPower (SPWR), Suntech (STP) and JA Solar (JASO). But Shah also noted that most solar companies have provided “somewhat aggressive guidance” for 2009 on the assumption that poly supply would become readily available from the spot market or silicon partners.

Read the rest of this post

Sunshine is free. Solar modules are not. But they are getting cheaper: UBS analyst Stephen Chin today revised his forecast for solar module pricing to down 20 percent from a previous estimate of down 14 percent. Chin says the recent move by the government in Spain to cap its solar subsidy program will move solar module volumes to other markets, including Germany and Japan, where lower pricing is required to generate favorable returns for solar system buyers. The revised Spanish solar subsidy program will cut installations in Spain to 300MW next year, from an estimated 1.2GW this year.

Chin today cut EPS estimates by about 10 percent for 13 global solar companies, including SunPower (SPWR), Evergreen Solar (ESLR), LDK (LDK), Suntech (STP), Yingli (YGE), Q-Cells, Solarworld, REC, Conergy, Solon, Motech, E-Ton and Sino-American Silicon. He also cut his rating on SunPower to Neutral from Buy, while increasing his rating on Energy Conversion Devices (ENER) to Buy from Neutral.

Read the rest of this post