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Tech stocks - Saturday, November 21, 2009

Making The Green Scene: Catching Up With Canadian Solar , Trina Solar and China Wind’s Earnings, ZeaChem To Start Cooking Soon, And The Best Of San Francisco Green Festival

It was an extremely busy week for renewable energy earnings lead by Canadian Solar (CSIQ:NASDAQ) reporting on Q3 2009. Overall the company showed sequential improvement from the previous quarter posting net revenues of $213.1 million compared to $114.2 million. Despite the increase in revenues, they were still behind the $252.4 million posted in the same quarter in the previous year. Profits showed strength as Canadian Solar posted a net income of $0.69 per diluted share, up $0.20 from previous quarter and a gain of $0.38 from the same quarter in the previous year. Europe continued to be Canadian Solar’s best sales region accounting for 87.6 percent of the company’s revenues. Sales in America and Asia declined. Boosting investor confidence was the company’s guidance of 600MW to 700MW shipped in 2010, more than doubling the 295MW to 305MW the company predicted for 2009.

Trinia Solar (TSL:NYSE) told a similar tale on Thursday as the company reported Q3 2009 revenues of $249.8 million, far better than the $150 million posted in the previous quarter but well short of the $290.7 million generated in the same quarter of the previous year. And like Canadian Solar, Trinia Solar’s earnings told a better tale as the company reported diluted earnings of $1.29 per share, almost doubling the $0.75 reported in the previous quarter and besting the $1.17 reported in the same quarter of the previous year. Trinia Solar’s gross margins also shined as the company reported 28.5 percent, well above the company’s 23.5 to 26.5 percent predicted range and 1.1 percent increase sequentially and 6.1 percent improvement from the same quarter in the previous year. Overall, the results reported by Canadian Solar and Trinia Solar show that both companies are doing a solid job dealing the drop in polysilicon prices that obviously affected revenues. But with Canadian Solar and Suntech Power (STP:NYSE) offering much improved guidance for 2010 this week, solar investors should be optimistic despite the uncertainties in the global economies.

China Wind Systems (CHWY:NASDAQ) offered nothing but good news as the company reported Q3 2009 net revenues increased 37.1 percent to $16.1 million. Net income was $0.09 per fully diluted share, a 9.4 percent increase from the same quarter in the previous year. China Wind credited its success to the sale of forged roll rings. Sales of forged roll rings to the wind power industry leaped 175.7 percent to $6.9 million, representing 42.6 percent of net revenues. While China Wind is not a pure renewable energy play, their ability to endure a three-to-one reverse stock split along with a sale 3.5 million Series A shares in September has helped stabilize their balance sheet. As long as forged roll rings remain essential to wind turbines, China Wind should prosper as the demand for wind energy continues to grow.

On Wednesday biofuel maker ZeaChem announced that they have begun construction on a 250,000 gallon-per-year plant in Boardman, Oregon. ZeaChem’s take on biofuel has the company converting biomass into fuels and other useful chemicals. Considering the company received $34 million back in January of this year to build their cellulosic ethanol biorefinery so it’s about time they announced they were breaking ground. And while 250,000 gallons is hardly enough fuel to keep 10 Hummers on the road for a year, the concept of creating fuel from biomass is extremely interesting and could play a role in reducing U.S. dependence on foreign oil.

Last weekend was San Francisco’s Green Festival. With 400 vendors and 40,000 attendees, the most interesting new exhibitor was a company that offers a solution for the lack of drinking water in the world. AirQuaUSA is the stateside extension of a company based in Singapore that manufactures a machine that turns air into water that is ph neutral and perfectly drinkable. With machines starting at $1995, the people who need this type of solution the most probably can’t afford it. But CEO Thomas Angell isn’t relying on home sales as he has been speaking with several government agencies about selling them the company’s more expensive, and larger, commercial units. With fresh water a priority for most disaster-relief efforts, Mr. Angell could be sitting on a potential gold mine. But if AirQuaUSA’s machines can reduce the amount of plastic bottles used each for bottled water, the true impact of this company goes far beyond potential profits.