Evergreen Solar walloping continues after 4Q loss, downgrades

Shares of Marlboro, Mass.-based Evergreen Solar (NASDAQ:ESLR) continued their dive this morning, losing more than 18 percent of their value in mid-day trading after poor 4Q numbers and analyst downgrades.

While the company announced yesterday that revenue doubled to $44.2 million, it still fell short of expectations, and shares of the company dropped 10 percent in after-hours trading. This morning, it was trading at $1.82.

Chief Executive Richard M. Feldt said Thursday the company was hopeful the long-term market prospects for the industry would shine, but analysts weren't so positive.

Jeff Osborne, an analyst with Thomas Weisel Partners, said "we see tough times ahead for Evergreen," given the weakness in the solar sector and constrained capital markets.

Last night, in a note to clients, Osborne lowered his 2008 revenue and earnings estimates to $113.1 million and a loss of 59 cents per share, from $114.1 million and a loss of 39 cents per share. For 2009 he cut the revenue estimate to $360.5 million from $372.5 million, and lowered earnings to 34 cents per share from a previous estimate of 36 cents per share.

In Thursday's call, Evergreen management discussed the possibility of partnering with a contract manufacturer for the production of cells and modules from Evergreen's string ribbon wafers. The move would defer up to 75 percent of the original projected capex for future expansion and still allow the company to hit its sales goals, it said.

But Weisel's Osborne wasn't fully reassured.

"It has been our belief that Evergreen's core competency is wafering and it makes sense for them to outsource the other steps of the process to a lower cost producer. However, management also was evasive on the call about current costs and what the cost benefits would be under such a contract manufacturing arrangement," said Osborne.

Evergreen posted a fourth-quarter net loss of $52.1 million, or 32 cents a share, compared with year-earlier net income of $788,000, or a penny a share. The latest results included facility shutdown and start-up costs and equipment write-offs.

Evergreen became the second publicly traded American solar company in 2000. It has recently reported a string of losses due to facilities-related costs (see Evergreen Solar spending up to $30M to close pilot plant).

Evergreen had traded as high as $17.22 a year ago.