NEW YORK ( TheStreet) -- Chinese solar company Suntech Power ( STP) easily beat the revenue consensus in the fourth quarter, at $945 million in sales versus the consensus at $843 million.

An eye-popping headline earnings per share beat of $2.02 versus consensus of 29 cents, on the other hand, isn't a comparison for investors to make. The company had $250 million non-cash value of project investments, as well as $50 million in equity income based on the fair value of assets tied to its recent acquisition of a solar wafer company.

Backing out the non-cash items, Hapoalim Securities analyst Aaron Chew estimates earnings of 38 cents on net income of $61 million, versus a consensus of 29 cents earnings.

Suntech shares were up 2% on Wednesday morning.

In addition, the Suntech 2011 guidance was exactly in line with guidance it provided in late 2010. Even though Suntech's revenue target of $3.4 billion to $3.6 billion is above the Street consensus, currently at $3.35 billion, Suntech Power had already guided the Street to a range of $3.4 billion to $3.6 billion.

Suntech gross margin guidance of 20% to 22% was in line with previous Suntech guidance also. Suntech guided to shipments being flat quarter over quarter for the first quarter of 2011.

Suntech earnings per share guidance for 2011 was also in line with its previous estimate of $1.40 to $1.60.

There were positive and negatives in the Suntech Power results within the top and bottom line. Suntech showed continued positive indications from its project business, Global Solar Fund, which had been a drag on Suntech shares until the third quarter 2010 when the company began booking revenue from the sales of modules to Global Solar Fund. In the fourth quarter, Suntech booked revenue of $53.6 million in the fourth quarter from GSF sales.

Among negatives in the Suntech numbers, gross margins declined in the quarter to 16.2%, from 16.4 % last quarter, and missed Street consensus by a notable mark, with the Street expecting margins over 17%. Input costs have been rising throughout the solar value chain. The company may have had to source more external cells and wafers that it previously implied in its guidance, the Hapoalim analyst said.

"The revenue beat is par for the course in the fourth quarter. Margins will get better with more internal wafering, but solar stocks are still to some extent going to be driven by concerns about Italian solar incentive changes and the pricing impact."

The Hapoalim analyst said that even with the big revenue beat in the quarter, the earnings per share, after backing out the non-cash items, was not a big beat, and the impact on EPS of sales to the Global Solar Fund project business may be starting to show up in the differential between the top and bottom line.

In the fourth quarter solar earnings reports, stocks have not gained significantly on fourth quarter beats, and any weakness in 2011 guidance has been met by severe punishment from investors. Even stocks that have beaten and raised have experienced the "sell on the news" trading action.

Other Chinese solar module leaders like Trina Solar ( TSL), Jinko Solar ( JKS) and Yingli Green Energy ( YGE) have reported strong fourth quarters but shares have been under pressure due to the Italian solar market headline risk.

Trina Solar and Jinko Solar reported huge earnings per share beats in the fourth quarter, though shares have declined since earnings. ReneSola ( SOL) reported a healthy fourth quarter but a weaker-than-expected module shipment outlook for the first quarter of 2011 and sold off by 16%, the largest loss among solar stocks in the post-earnings trade.

As Italy contemplates major changes to its solar incentive scheme, SunPower CEO Zhengrong Shi has been vocal in comments to the press as saying Italy will not have a great impact on its business in 2011.

Beyond the impact on pricing throughout the solar supply chain that could result from a slowing market in Italy, some of the Suntech Global Solar Fund projects upon which the non-cash equity value are in Italy.

-- Written by Eric Rosenbaum from New York.

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