Tag Archive | "italy"

What To Expect From The 2011 Venice Biennale

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via guestofaguest.com: This being an odd numbered year, about 300,000 art lovers are set to gather in Venice, Italy for the the 2011 Venice Biennale. The tremendous bi-annual (dur) contemporary art exhibition begins this week and we have the all the details on what to expect from this year’s event. MORE>>

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Opening Bell: 05.23.11

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Options Trading in SAC Probe (WSJ, earlier)
Congressional investigators are broadening an early-stage stock-trading probe into SAC Capital Advisors, with plans to examine any suspicious trading by the hedge-fund giant in the options market, another arena where investors wager on the prospects of companies and deals, according to people familiar with the matter. The Wall Street Journal reported Friday night that Iowa Sen. Charles Grassley, the top Republican on the Senate Judiciary Committee, is investigating roughly 20 instances over the past decade when the Financial Industry Regulatory Authority, a Wall Street regulator, suspected SAC could have bought and sold stocks based on inside information.

Fitch cuts Greek rating, warns over restructuring (Reuters)
“An extension of the maturity of existing bonds would be considered by Fitch to be a default event and Greece and its obligations would be rated accordingly,” the rating agency said. If private sector ‘burden sharing’ is coercive, the credibility of EU/IMF policy commitments not just for Greece but also Ireland and Portugal would be severely diminished and affect financial stability across the euro area, it said.

Lagarde Is Front-Runner To Head IMF (Bloomberg)
“Lagarde might be front-runner,” New Zealand Prime Minister John Key said in an interview with TVNZ television today. “She’s super impressive I’ve got to say,” he said, while echoing officials outside of Europe in calling for a selection “on merit.”

Singapore to Create Most Bank Jobs in the Next Year, London Recruiter Says (Bloomberg)
Singapore will create more jobs in financial services during the next 12 months than any other city, beating London and New York, said recruiter Astbury Marsden, which advises companies in Europe and Asia.

Biggs Buying as S&P 500 Profit Estimates Climb (Bloomberg)
“Investors are overreacting,” said Biggs, citing concerns about the European debt crisis, housing and reduced stimulus from the U.S. Federal Reserve. “All those worries are true, but I can see a number of them will be resolved in the next two months, and I do not think the global economy will slow down significantly. Stocks are very reasonably priced on earnings for next year.”

Zapatero’s Socialists Routed in Backlash Over Austerity (Bloomberg)
Spanish Prime Minister Jose Luis Rodriguez Zapatero’s Socialist party had its worst electoral setback in more than 30 years, prompting a shift in regional governments that risks reviving concern over public finances…The transfer of power in the regions may spark doubts over Spain’s ability to contain its budget deficit, and Spanish bonds declined today.

S&P warning heralds tough times ahead for Italy (Reuters)
Standard & Poor’s surprising decision to revise downward its outlook for Italy could mark the start of increased market scrutiny on the euro zone’s third-largest economy, which faces tough challenges that it is probably unable to meet.

Times Columnist, Wife, Charged In Domestic Argument (Hartford Courant)
New York Times technology columnist David Pogue and his wife were charged with disorderly conduct earlier this week following a domestic argument at a Woody Lane house, part of which she recorded on her iPhone, police said…He told police his wife had bitten his left arm and that she had been filming the altercation with her iPhone camera. Arciola said David Pogue followed Jennifer Pogue into a bedroom and allegedly jumped on top of her and hit her in the head with a phone…In addition to his column, Pogue writes a monthly column in Scientific American. He also appears weekly on CNBC’s “Power Lunch” and on “CBS News Sunday Morning.”

JP Morgan and Morgan Stanley keep barbarians at the gate (eF)
Companies seeking to fight off a hostile takeover approach should consider hiring JP Morgan to defend them, according to new rankings compiled by Financial News.

Emerging market bond fund flows signal shift (FT)
Eight consecutive weeks of net inflows have taken the total invested in these funds this year to $7.9bn, according to EPFR, the fund data provider…Robust inflows into emerging market bonds stand in contrast to nervousness over potentially overheating equity markets in developing countries, and the debt crisis in western Europe’s periphery. Investors have pulled $12.9bn out of European bond funds this year, and more than $7bn was withdrawn from global equity funds last week, of which $1.6bn came from emerging market equity funds, according to EPFR.

Buyers Battle for Europe’s Bad Loans (WSJ)
As banks across Europe clean up their balance sheets, it is causing a feeding frenzy among hedge funds and private-equity firms hungry for their troubled assets…Among the buyers is Marathon Asset Management LP… Other buyers include Fortress Investment Group LLC, OakTree Capital Management, York Capital Management, and Och-Ziff Capital Management, according to industry officials.

Utah making gold and silver coins legal currency, pushing debate about national gold standard (AP via WaPo)
Utah became the first state in the country this month to legalize gold and silver coins as currency. The law also will exempt the sale of the coins from state capital gains taxes.

NY senators bat with banks on rule change (NYP)
The Senate agricultural committee is set to host hearings as early as mid-June to discuss new derivatives rules, which have become a hot-button issue on Wall Street, The Post has learned. US legislators, including Sens. Chuck Schumer and Kirsten Gillibrand, have been fighting on behalf of firms like JPMorgan Chase, Goldman Sachs and Morgan Stanley, arguing that new rules on complex derivatives securities being hammered out under the Dodd-Frank regulatory reforms put domestic banks at a “competitive disadvantage.”

Inside a Battle Over Forex (WSJ)
Bank of New York Mellon Corp. has been fighting accusations that it took advantage of clients while trading currencies…BNY Mellon priced 58% of the currency trades within the 10% of each day’s trading range that was least favorable to the fund, the analysis shows. As a result, the trades cost the pension fund, the Los Angeles County Employees Retirement Association, $4.5 million more than if the average trade occurred at the middle of the trading range for each day, the analysis showed.

Yuan Funds May Be More Illusion Than Oasis (WSJ)
But already, firms that manage dollar funds and are setting up yuan funds, too, are grappling with a conundrum: How do you convince your foreign investors—referred to as limited partners, or “LPs,” in the private-equity world—that you are keeping their best interests at heart while you scour China for deals to invest in with renminbi? Foreign LPs already had reason to worry that things weren’t going in their favor. When it involves foreigners, approval for an investment in China can take 18 months or longer. Also, more and more companies in China are reluctant to take foreign money because doing so complicates their ability to go public in Shanghai or Shenzhen, thanks to arcane Chinese listing regulations.

CDB seeks to join TPG stake purchase (FT)
China Development Bank, one of the country’s largest state-owned banks, has applied to regulators for permission to join a group of sovereign wealth funds buying a minority stake in buy-out firm TPG, according to people familiar with the matter. CDB’s request is the latest indication of the private equity fever sweeping China as local dealmakers leave the major buy-out firms and banks to set up their own investment firms.

KKR to Buy Ipreo, a Capital-Markets Data Firm (WSJ)
KKR is acquiring Ipreo from another buyout firm, Veronis Suhler Stevenson LLC. Ipreo, based in New York, provides a range of financial data, deal-related information and investor-communication tools to investment banks and companies. It also has software that assists banks and companies in marketing new stock to potential buyers. One of its databases, called Bigdough, contains contact information for thousands of institutional investors that Ipreo clients can use to pitch hedge funds and other types of investors.

Cassette tapes make a comeback (WaPo)
Four years ago, cassette tapes were headed toward their funeral. In 2007, British tabloid The Sun declared the death of the cassette, after the announcement that a major electronics retailer in the United Kingdom would cease selling cassette tapes…Then, last year, cassettes began to rise from the dead. In the fall, NPR reported that cassettes were having a “kind of” revival, with at least 25 labels in the United States putting out new music exclusively on tape. In a lengthy essay in Pitchfork, contributor Marc Hogan detailed examples of the “broader underground resurgence” of cassettes.



Article courtesy of Dealbreaker

SunPower: ThinkEquity Cuts To Hold, Slashes ’11 Estimates

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Shares of SunPower (SPWRA) are down 14 cents, or 0.7%, at $21.24 after the company last night met pre-announced Q1 results but forecast the current quarter’s revenue below analysts’ expectations and said that it will revise its full-year forecast later this quarter.

The company is in the midst of going through a tender offer by oil company Total (TOT), which plans to buy up to 60% of the stock.

This morning, there’s one downgrade of the stock, from Buy to Hold, by ThinkEquity’s Colin Rusch, who cut his price target to $19 from $22. He cut his 2011 estimate to $1.13 in EPS, down from $2.15 previously, and cut his revenue estimate to $2.44 billion from $2.86 billion.

“While we are bullish on SunPower’s position and believe the company is executing well on its cost reduction and should benefit from the flexibility of its business model as the solar industry rationalizes, we are lowering estimates for 2011 and 2012 to reflect a more cautious outlook,” Rusch writes. Rusch expects the company may need to write down “at least a portion of its SunRay acquisition,” even though it should be able to monetize its land and permits, he thinks. He also thinks SunPower will move closer to 75% of shipments coming from modules, versus an expectation previously of just 50%.

Bullish!

Robert Stone, Cowen & Co.: Reiterates an Outperform rating, while raising his revenue estimate for this year to $2.83 billion from a prior $2.39 billion, and cutting his EPS estimate to $2.05 per share from a prior $2.11. He also cut his numbers for revenue and profit for next year. He sees the company benefitting from a shift to rooftop installations in Italy and away from utility-scale projects: “About 15MW of UPP projects (vs. 130MW planned) are expected in Italy. But, new FIT policies should favor SPWRA’s strength in rooftops; it is #2 in Italy with 500 dealers, and the small system segment is uncapped.” The company’s North America business, 45% of revenue in the quarter, should help as well, he thinks.

Ben Pang, Caris & Co.: Reiterates an “Above Average” rating and a $24 price target. “The near term performance of SPWRA shares will be capped by the offer from TOT,” he writes, though he expects “no roadblocks” to the offer. As for the expected forecast update, he thinks it will be below the current consensus estimate of $2.8 billion in revenue and $1.92 EPS. Hence, Pang cut his 2011 estimate to $2.65 billion and $1.81, from a prior $2.85 billion and $2.11. “We do not expect any new bidders to come in above TOT’s offer of $23.25, but a resolution to some of the overhanging legisla- tive issues should be an additional positive catalyst.”

Bearish!

Mark Bachman, Auriga Securiites: Reiterates a Sell rating and a $13 price target. The Total bid puts a floor under the stock, and he wouldn’t recommend shorting the shares, but, “but we do suggest existing holders of SPWRA and SPWRB tender their shares and/or consider selling June or July calls against any shares at these levels given risk of the deal possibly not completing.” The Q1 report was “the worst we have heard so far this reporting season,” he writes. SunPower has gone from net cash to net debt on the balance sheet, he writes, while inventory days tripled. “In short, this is not the company of a few years ago and investors looking for exposure to the solar space are encouraged to look elsewhere.”

Timothy Arcuri, Citigroup: Reiterates a Hold rating on the shares and a $16.50 price target. “While inventory should begin to clear given resumption in the Italian rooftop and a seasonally better German market,” he writes, it will come at a price because Chinese solar modules are selling for about $1.40, below the $2 per watt or so that SunPower is used to getting. “So we see further risk in estimates.” Arcuri is maintaining his 87-cent EPS estimate for this year.

Article courtesy of Tech Trader Daily

Opening Bell: 05.12.11

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Next Up: A Crackdown on Outside-Expert Firms (DealBook)
With the government securing a conviction against Raj Rajaratnam of the Galleon Group on Wednesday, federal prosecutors will shift their focus to expert networks — the intricate web of money managers, corporate executives and consultants at the center of another wave of insider trading cases.

Goldman Sachs Viewed Unfavorably by 54% (Bloomberg)
The company was viewed less favorably than other banks by the 1,263 poll respondents. While 54 percent said they had an unfavorable view of Goldman Sachs, 25 percent felt the same about JPMorgan, 49 percent for Citigroup Inc. (C) and 48 percent for Bank of America Corp. (BAC) Thirty-five percent had an unfavorable view of Frankfurt-based Deutsche Bank AG (DBK), which was also singled out in the U.S. Senate subcommittee report.

AIG Share Sale Starts But Could Be Pulled (WSJ)
The stock offering commenced Wednesday following lengthy discussions between Treasury and AIG’s management and directors about what they want to achieve from the share sales…Following the discussions, the Treasury and AIG are now in alignment about how to proceed with the offering, and they won’t sell shares if taxpayers don’t earn a profit now and in the future on the sales, according to people familiar with the matter. In other words, if they don’t get the price they want, Treasury will “pull the deal,” said one of the people.

Glencore Said to Gain Double Orders for IPO (Bloomberg)
Glencore International Plc received enough demand from investors for its $11 billion initial public offering to sell the shares more than twice over, according to three people with knowledge of the matter. Highbridge Capital Management LLC, a hedge fund owned by JPMorgan Chase & Co., proposed a $500 million investment, said one of the people, who declined to be identified because the information isn’t yet public. The last orders for the offer are due on May 18, with final pricing to be disclosed the following day, according to a term sheet for the sale.

Exit interview: Kobe Bryant says Lakers’ failed title run was a ‘wasted year of my life’ (LA Times)
Kobe Bryant is never much for sentimentality, and he’s not going to change any time soon. So when he reflected Wednesday on the Lakers’ underachieving 2010-2011 season, which included being swept in a Western Conference semifinal series, Bryant didn’t mince words on his disappointment.

China hikes reserve requirement ratio for banks (MarketWatch)
The People’s Bank of China lifted the ratio of funds domestic banks must set aside as reserves on Thursday, the fifth such hike this year amid persistent inflation concerns. From Monday the reserve requirement ratio will be increased 0.5-percentage point, bringing the rate to 21% for most big banks and 19% for smaller banks.

Copper tumbles to 5-month low on growth blues (Reuters)
Copper tumbled to a five-month through on Thursday as investors headed for the exit, fearing slower economic growth and demand from top consumers China and the United States. Also weighing on sentiment was the stronger dollar .DXY across a basket of currencies, which makes commodities priced in dollars more expensive for holders of other currencies.

SEC Investigating State Street Foreign Exchange (WSJ)
The Securities and Exchange Commission is investigating State Street Corp.’s foreign-exchange trading on behalf of pension funds in a sign that law-enforcement probes into how custody banks process tens of thousands of foreign-exchange trades are widening.

Draghi to Take Helm at ECB in November (Bloomberg)
[Italy’s Mario] Draghi, 63, will on Nov. 1 inherit an ECB that’s almost unrecognizable from the one Jean-Claude Trichet took charge of eight years ago. The bank’s balance sheet has more than doubled to 1.9 trillion euros ($2.7 trillion), mostly as a result of the extraordinary measures it used to battle the global financial crisis and now Europe’s sovereign debt woes…[German Chancellor Angela] Merkel made clear she’s backing the Bank of Italy governor in the expectation he will subscribe to the tight-money tradition of the Bundesbank, which provided the blueprint for the ECB when it was created 1998.

Bill Proposes Mortgage Shake-Up (WSJ)
Two lawmakers, a California Republican and a Michigan Democrat, are set to unveil legislation Thursday to replace mortgage giants Fannie Mae and Freddie Mac with at least five private companies that would issue mortgage-backed securities with explicit federal guarantees… Like Fannie and Freddie, the new entities would be restricted to buying loans that meet certain standards, including size caps. But the firms would have to hold much more capital than Fannie and Freddie.

Goldman, Beijing Launch Yuan Private-Equity Fund (WSJ)
Goldman Sachs Group Inc. has signed a deal with the Beijing government to launch a yuan-denominated private-equity fund that aims to raise 5 billion yuan ($769 million), according to a person familiar with the situation.

Morgan Stanley to Announce Private-Equity Yuan Fund (WSJ)
Morgan Stanley is expected to announce details of a yuan-denominated private equity fund in Hangzhou next week, according to a person familiar with the matter. The Wall Street firm will be running the fund in a partnership with Hangzhou Industrial & Commercial Trust Co., the person said. It wasn’t immediately clear how much the fund expected to raise.

China growth could slow to 8 percent: Goldman’s O’Neill says (Reuters)
“It is my judgment that the Chinese economy is probably slowing down more than people realize,” [O'Neill, Chairman of Goldman Sachs Asset Management] said, adding that as a result, he was not surprised that commodity prices are coming under pressure. As evidence, he cited the Goldman Sachs China Activity Index, the firm’s propriperary indicator of GDP, which shows that the momentum of Chinese growth has slowed, and that slowdown was supported by economic data reported this week. “And I suspect that China is going to slow down to around 8 pct GDP growth. If I’m right, that means sometime in the 2nd half this year, Chinese inflation will not be a problem, and will come back down to around 4 percent,” he said. “And the PBOC will be able to stop tightening monetary policy and we can all live happily ever after.”

UBS: Basel Rules Leave Banks Overcapitalized (WSJ)
Banks will likely have too much cash by 2019 as a result of the Basel III global banking rules, UBS AG Chief Executive Oswald Grübel said Thursday. “In the next 10 years, at the end of 2019, we will have overly liquid, overcapitalized banks,” said Mr. Grübel, who was addressing a business audience at a conference here. “However this also means we won’t have a lot of growth,” he said.

MIT sells $750m of century bonds (FT)

The Massachusetts Institute of Technology is planning to sell 100-year bonds as the recent drop in interest rates draws a flood of bond issuance this week.

In Exquisite Detail, Donald Trump Describes How He Styles His Hair (Rolling Stone via Vanity Fair Daily)
“O.K., what I do is, wash it with Head and Shoulders. I don’t dry it, though. I let it dry by itself. It takes about an hour. O.K., so I’ve done all that. I then comb my hair. Yes, I do use a comb. Do I comb it forward? No, I don’t comb it forward. I actually don’t have a bad hairline. When you think about it, it’s not bad. I mean, I get a lot of credit for comb-overs. But it’s not really a comb-over. It’s sort of a little bit forward and back. I’ve combed it the same way for years. Same thing, every time.”



Article courtesy of Dealbreaker

Yingli Cuts Q1 Shipment View, Reiterates Year View

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Shares of solar energy technology provider Yingli Green Energy (YGE) are up 10 cents, or 0.9%, at $11.46 after the company cut its Q1 outlook but reiterated its year outlook, citing changes in Italy’s subsidies for solar energy projects.

Yingli said shipments in Q1 are expected to fall by “a low teen percentage” from Q4, rather than the “mid-single digit” gain the company had originally forecast. Gross margin is expected now in a range of 27% to 27.5%, versus 30% to 31% expected previously, and down from Q4′s 32.9%.

Yingli said delays in finalizing a new subsidy plan in Italy caused uncertainties on funding that “led to delays in solar power projects in Italy.” The company said severe weather in Germany also reduced Q1 shipments.

Yingli’s announcement follows similar announcements yesterday, with JA Solar (JASO) saying its module shipments would fall this quarter because of the Italian actions, and Trina Solar (TSL) cutting its own module forecast for last quarter.

For the full year, the company still expects to ship 1.7 gigawatts to 1.75 gigawatts worth of photovoltaic modules, it said.

Yingli will announce full quarterly results on May 20th.

Article courtesy of Tech Trader Daily

Deals & More: musiXmatch gets $3.7M for legal song lyrics

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Today’s funding announcements include online services for songs, classifieds and Twitter management:

musiXmatch raises $3.7M for online song database: The developer of a digital lyrics API has raised a first round of funding led by Italian investor Francesco Micheli Associati to expand its lyrics service to application developers and music services. Based in Bologna, Italy, the 9-employee startup has more than 5.3M officially licensed lyrics and is available in more than 18 languages.

Quikr brings in $8M for local online classifieds: Quikr Mauritius, a holding company of Quikr India, has raised a new round of funding led by Nokia Growth Partners for its web and mobile free classifieds service. The Mumbai, India-based web site, which enables users to buy, sell, rent or find objects, events and services, is available in more than 40 cities in India and has more than 10M consumers each month.

MediaRoost gets $500K to help businesses manage Twitter: The Metuchen, New Jersey-based company has raised a round of seed funding for its enterprise Twitter management tool, called TweetRoost. The service, co-founded by business partners of more than 30 years, launched in April and helps organizations monitor and analyze their social media presence.

U-Systems raises $6.5M for breast ultrasound tech: The developer of breast imaging technology has raised a new round of funding from investors including iD SoftCapital Group, Lumira Capital, PIIH, Radius Ventures and Sycamore Ventures. Founded in 1997, the company is based in Sunnyvale, Calif. and is developing an automated breast ultrasound system.

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Article courtesy of VentureBeat » deals

First Solar: One Upgrade, Three Downgrades; Chanos Piles On

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Shares of First Solar (FSLR) continue to trade down this morning following an 8%-or-so drop last night after a Q1 report that beat estimates but saw the push-out of a project in Q2 and some cautious comments about solar energy subsidy regulation in Europe.

First Solar shares are down $8.66, or 6.4%, at $126.

None other than hedge fund titan Jim Chanos was on CNBC yesterday afternoon talking down the stock, predicting the price could drop to “the mid double-digits.” Note that Chanos’s remarks came in the context of his warning to get the heck out of China, where he thinks the growth path of the economy is unsustainable.

There’s a real easy part of the story: Insiders are selling lots and lots of stock over the past year, and insiders are leaving the company. That’s never a good sign. Whether you should be short, we have some issues with some of their accounting, we have some issue with some of their subsidized markets. And quite frankly, solar, still, is at a point where it does not compete with natural gas. we cannot rely on wind and solar for base load. We’re still looking for the magic bullet for solar and wind. I think the stock certainly could earn a lot less than the $9 run-rate the bulls are looking at.

(See the video below.)

Eric Rosenbaum of TheStreet.com today offers some thoughts on what he says are Chanos’s repeat appearances on CNBC with bad things to say about FSLR.

I see three downgrades this morning — I missed one earlier, from Credit Suisse — and one upgrade in the Street’s initial assessment, but also a deep divide between those who don’t like how much emphasis has been put on the latter half of the year to make the $9 profit mark, and those who see plenty of levers for First Solar to pull:

Bullish!

Mark Bachman, Auriga Securities: Raised his rating on the shares to Buy from Hold, with a $160 price target. “First Solar modules remain in high demand given the combination of low price and high energy yield,” writes Bachman. Bachman observes that while subsidy reductions create uncertainty, as long as investors can obtain debt financing and as long as First Solar’s modules offer investment returns that are “above project hurdles,” then there will actually be a “dramatic increase” in solar investment as projects rush to get going before the next subsidy adjustment. First Solar has the ability to increase project installations in the U.S., and to get into new Asian markets. “We also recognize management’s historical accuracy of forecasting both sales and profitability, thus the reiteration of 2011 guidance speaks volumes to us.”

Robert Stone, Cowen & Co.: Reiterates an Outperform rating. The project push-out woes, the hand-wringing over Europe, and the back-end-loaded year outlook make for a buying opportunity in the stock, he thinks, as this is just a “pause” for the company.

Ramesh Misra, Brigantine Advisors: Reiterates a Buy rating and a $170 target. Today is a buying opportunity, as the North American utility-scale projects provide a buffer to European troubles. The projects push-outs and the tariff issues were “not entirely unanticipated,” he writes. “While any revenue push-out [from the company’s Agua Caliente project] is a negative development, we are not overly concerned about this. The company’s EPC business will, almost by definition, tend to be lumpy based on the timing of revenue recognition.” Misra also offers that any rise in the Chinese renminbi could have an adverse impact on Chinese competitors to First Solar.

John Hardy, Gleacher & Co.: Reiterates a Buy rating and a $165 price target. He’s keeping his 2011 estimate of $3.8 billion in revenue intact, while trimming his EPS estimate to $9.66 from $9.70. “Stock and sector are likely to remain under pressure until Italy is sorted out and poly module pricing begins to solidify, but we continue to view FSLR as an outperformed given project flexibility in the U.S.

Mark Wienkes, Goldman Sachs: Reiterates a Buy rating and a $190 price target, saying that he likes “the risk-reward in the stock, particularly given increased strategic interest in solar companies (Total, GE, Hanwha), cost cuts are tracking on plan and are allowing for constructive ASP declines, larger markets, and fewer variable competitors, and 2011 production is allocated, with the pipeline buffer offering a profitable source of demand in both the second half of 2011 and 2012 should European markets remain soft.”

Bearish!

Ben Pang, Caris & Co.: Cut his rating on the stock to Average from Above Average and cut his price target to $139 from $172. “We think there is much higher risk to estimates due to growing uncertainty regarding renewable energy programs in Europe.” With Europe accounting for 70% of shipments, by his estimate (I’m assuming he means industry shipments), Pang sees increasing political gridlock in Europe as being not fully compensated for by First Solar’s “buffer” in North America. Pang cut his full-year estimates to $3.74 billion in revenue and $9.38 in EPS from a prior $3.79 billion and $9.43.

Dan Ries, Collins Stewart: Cut his rating to Neutral from Buy, with a $144 price target from $180, and cut his 2011 estimates to $3.75 billion and $9.36 per share in earnings from a prior $3.79 billion and $9.60 per share. “Given that the Department of Energy process [which is part of the Agua Caliente ramp-up] is an unknown to investors, we expects First Solar’s P/E multiple to contract while the risk of additional delays is present,” writes Ries. He cut his own P/E to 12 times from 15 times. “We will reconsider our rating if the stock approaches $100 or if we get greater clarity on the construction schedule for its large systems backlog.”

Satya Kumar, Credit Suisse: Cut his rating to Neutral from Buy and cut his price target to $115 from $137. “Our view has been that the stock is not interesting until it is closer to the $100 to $125 range.” Kumar’s sum-of-the-parts valuation of the stock assumes $90 of value for the panel business; $11 for the system business; and $14 worth of value for the cash on the balance sheet and “management premium.”

Gordon Johnson, Axiom Capital: Reiterates a Sell rating. “First Solar’s guidance implies an acute recovery in the second half. We believe this year will be defined by multiple estimate revisions for First Solar.” Johnson thinks First Solar is implying it can double or triple the build-out rate of the Agua Caliente project to meet the $9.50 earnings target. That would imply, he argues, 50 megawatts per month for the project, when project terms as agreed to were for just 20 megawatts per month. “While this is admittedly possible … we believe there has been a fundamental change in the story,” given the implied cut to Q2 outlook, a lower outlook on module sales for Q2, which he thinks implies a build-up of inventory; and an average cost for modules that is flat, year over year, implying “the business of selling modules is becoming less profitable,” he believes.

Weston Twigg, Pacific Crest: Reiterates a Sector Perform rating. Twigg sees a “ramp-up” of the utility-scale solar business as a buffer for First Solar in the second half of the year against lower module prices caused by competing silicon products. Twigg is concerned, however, by the recent departure of Bruce Sohn, who was the company’s “manufacturing guru,” in his view. While there’s upside potential for $182 per share, he writes that he has “little conviction” in the stock hitting that.

Article courtesy of Tech Trader Daily

First Solar Q1 On Tap Tomorrow

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Solar energy technology provider First Solar (FSLR) will report Q1 results tomorrow after the bell. Analysts on average are expecting $544 million in revenue and $1.16 per share in earnings.

Dan Ries with Collins Stewart today reiterated a Buy recommendation on the shares, predicting $535 million in revenue and $1.10 in EPS. He sees 325 megawatts worth of module shipments in the quarter, and 40 megawatts of project sales. Ries notes that “uncertainty” in the Italian solar market has brought down module average selling prices for the industry “significantly,” but that it likely didn’t impact First Solar in Q1 given the company’s long-term contracts. He’s projecting an average selling price of $1.37 per watt, a cost-per-watt of 75 cents, and a gross margin of 42.3%, for a 6.4 percentage-point decline. While First Solar won’t offer a quarterly forecast, per usual, he’s modeling 100 megawatts of project sales in Q2, to produce $839 million in sales and $2.05 per share in earnings.

Cowen & Co.’s Robert Stone reiterated an Outperform rating, calling for $525 million in revenue and $1.08 in EPS. “We believe potential revenue upside was likely limited by timing of system revenue and soft European channels,” he writes. Stone expects the company’s full-year projection for $9.25 to $9.75 per share in earnings is “intact.” He sees Italy’s subsidy policy for solar installations being finalized tomorrow at a cabinet meeting, and that as a result, “small rooftop systems” could help improve demand in the sales channel.

Article courtesy of Tech Trader Daily

Solar: Jefferies Upbeat On Italian Subsidy Corridor

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As had been speculated in recent weeks, Italy’s discussion of subsidies for its solar-power industry is tilting toward a diminution of how much the country will spend based on a target spending rate, reports Reuters’s Stephen Jewkes in Milan.

The latest version of the country’s decree on subsidies puts a target on installed capacity of solar of 23 gigawatts through 2016, but that is apparently tied to an estimated annual cost of €6 billion to €7 billion in subisides, writes Jewkes. Jewkes notes discussions today should lead to a presentation by the Industry and Environment ministries of Italy at meeting tomorrow.

In a note this morning, Jefferies & Co. analyst Jesse Pichel reiterates a view that the present discussion are leading to what’s been referred to by analysts as a “corridor” of solar capacity in Italy of 2 gigawatts to 3 gigawatts annually. Pichel emphasizes that the ministries’ proposals are “regulations, not a law,” and as such don’t require a vote of parliament.

Pichel sees the main impact of the solar tariff, or subsidy, reduction coming in 2012:

In the second half of 2011, [subsidies] may be capped to 1500 megawatts to avoid excessive FITs [feed-in tariffs], [and] when combined with the first half [of 2011] should allow 2.5 gigawatts for 2011. In terms of FIT, we expect a modest decline in the second half, with most of the decline in 2012. We believe the mechanism for rationalizing the overly generous FIT in 2011 is the main hold up to the regulation. Also, whether the large systems will be subject to bidding, rather than a FIT is a main question for 2012.

Pichel reiterated Buy recommendations on Yingli Green Energy (YGE), Trina Solar (TSL), and JA Solar (JASO). There will likely be greater volatility in shares of SunPower (SPWRA) and Power-One (PWER), he thinks, given that the two, “are most levered to the Italian regulation,” and especially any constraints on ground-based installations, he writes.

Solar shares today are down in an overall down market for the Nasdaq: Shares of YGE are down 10 cents, or 0.9%, at $11.48; Trina shares are down 70 cents, or 2.5%, at $27.01; and JA Solar shares are down 10 cents, or 1.6%, at $6.08. SunPower is down 37 cents, or 2.4%, at $14.97. Power-One is off 11 cents, or 1.5%, at $7.31.

Article courtesy of Tech Trader Daily

Power-One Recovers Despite Q1 Forecast Cut

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Shares of Power-One (PWER), which makes inverters that convert power from renewable energy sources, are down 29 cents, or 3.5%, at $8, after the company late yesterday cut its Q1 outlook, citing “near-term feed-in-tariff uncertainty in Italy and Germany,” referring to European subsidies for renewable energy.

Power-One now sees revenue of $240 million to $245 million, down from a prior $260 million to $290 million, it said.

CEO Richard Thompson remarked,

Although we expect to post a nearly 60 percent increase in revenue in the first quarter of 2011 compared to 2010, we’ve revised our guidance for the quarter due to recent adverse conditions in the European solar market. We still anticipate European countries such as Italy and Germany will continue to support solar adoption to reduce reliance on non-renewable sources of power. Further, for the remainder of 2011 and 2012, we believe we are better positioned to handle similar regional anomalies due to our expanded product line and focus on developing new markets, including the United States, China and India.

Who told you so? Gordon Johnson of Axiom Capital, I would note, actually cut his revenue estimate for PWER for the quarter last week to $248 million from a prior $271 million estimate. Johnson’s estimate cut came after competitor SMA Solar Technology AG of Germany on March 30th forecast Q1 revenue below estimates, citing Italian policy changes.

By and large, bulls and bears are sticking to their views on the stock this morning, while all are trimming estimates:

Jesse Pichel with Jefferies & Co. reiterates a Buy rating on the stock, while cutting his price target to $10 from $12, writing that, “We believe a weak Q1 is mostly factored into expectations given the slow-down in Italy and seasonality / bad weather in Germany. With Germany picking up and an Italian decision ~1 week away, we see sequential growth in Q2.” Pichel cut his 2011 estimates to $1.12 billion from $1.18 billion in revenue, and to 90 cents in EPS from $1.05 previously. Pichel looks to Power-One’s analyst day on May 17 as a “catalyst.” The “read-through is negative on inverter companies,” he writes, including Satcon (SATC), although he notes that SATC “is less exposed to Europe (15%) than peers.” SATC shares today are down 6 cents, or 1.6%, at $3.44.

Edwin Mok with Needham & Co. reiterated a Hold rating on PWER shares and cut his 2011 estimate to $1.05 billion in revenue from a prior $1.2 billion estimate, and cut his EPS estimate to 98 cents from $1.28. With a higher mix of revenue now destined to come from Power-One’s “traditional” power business, Mok sees operating margin declining to 22% this year from 25% last year.

Mark Bachman with Auriga Securities maintains a Buy rating on the shares and a $13 price target. He estimates 175 megawatts of shipments were lost “as a result of the Italian work stoppage.” Bachman cut his full-year revenue view to $1.21 billion in revenue from a prior $1.34 billion, and cut his EPS estimate to $1.10 from $1.30. Bachman is “encouraged” by industry data showing “increasing applications using PWER inverters.” However, he’s also concerned, because PWER had no presence at the “PV America” trade show this week, even though all of the company’s competitors were there.

Article courtesy of Tech Trader Daily