Winners & Losers

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Energy Winners & Losers: Sunpower

The Associated Press

The solar sector slid on Tuesday as solar power companies continued to face weak customer demand and dried up credit markets.

Shares of Sunpower (SPWRA Quote) fell $2.91, or 6.45, to $42.24. JA Solar Holdings (JASO Quote) shares dropped 14 cents, or 2.75%, to $4.94. Energy Conversion Devices ( ENER Quote) shares sank 17 cents to $29.21.

JPMorgan analyst Christopher Blansett recommended selling solar stocks as he expects prices to fall and bottom out later in the year. Blansett warned investors not to expect a recovery in solar stocks in the event of a broader economic rebound in 2009, as solar subsidies may have peaked in 2008 when Germany and Spain primarily drove demand.

Blansett expects solar subsidies to decline significantly this year, forcing prices to drop between 25% and 40% compared to last year.

Finally, Blansett added that constrained credit markets could "bring the alternative energy industry to a screeching halt if access to capital is not made more available."

Shares of LDK Solar (LDK Quote) fell 7 cents to $14.77 the day after the maker of wafers for solar cells trimmed its fourth-quarter revenue estimate 23%, citing deferred shipments by customers due to the global recession.

"The company is negatively impacted by weaker end-demand, tougher pricing and poly ramp delays," said Sam Dubinsky, an analyst at Oppenheimer, who called the company's revised outlook a "big miss."

Shares of Evergreen Solar (ESLR Quote) dropped 8 cents, or 2.2%, to $3.50 on Tuesday, on news that the company closed its Marlboro facility and will incur up to $30.4 million in related costs.

The maker of solar-power products said it will incur charges of about $25 million, mostly in the fourth quarter of 2008, related to the write-off of manufacturing and development equipment and leasehold improvements of the Marlboro pilot facility.

In addition, the Marlboro, Mass.-based company said it expects to incur about $350,000 in severance costs over the next few months for Marlboro facility employees not transferred to its Devens factory.

Over the next year, Evergreen could also be charged $3 million to $5 million for location restoration, disposition and moving costs.

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