Solarfun Power Holdings Co. (SOLF) posted solid Q3 results in mid November that saw the company swing to profitability from last year. Estimates have also been on the rise as shares approach the 52-week high just short of $9.
Company Description
Solarfun Power Holdings Co., an investment holding company, develops and manufactures photovoltaic cells and PV modules. The company was founded in 2004, has a market cap of $424 million and is headquartered in China.
Third-Quarter Results
Shares of SOLF surged higher on Nov 16 after the company swung to a third-quarter profit on strong margin expansion and an optimistic outlook. Even though revenue was down 22% from last year to $144 million, earnings came in strong at 37 cents per share, 23 cents ahead of the Zacks Consensus Estimate. The company has beat in each of the last four quarters by an average of 471%.
Solarfun’s operating profit jumped to $19 million from a loss of $2 million last year. The company’s cash position now stands at $116 million against short-term borrowing of $148 million, with additional credit facilities available to help fund current liabilities.
Guidance
Looking forward, the company said it expects strong Q4 shipments with prices down about 5% from the previous quarter. President Peter Xie added that “We expect to see a healthy demand environment in 2010. We expect strong demand from Germany as project development is accelerated in response to expected feed-in-tariff reductions, from new markets like China and the United States, and as the general availability of funding for solar projects improves.”
Estimates Advancing
Estimates have been on the upswing for the last few months, with the current year adding 40 cents to a loss of 14. The next-year estimate is pegged at 59 cents.
The Chart
Shares of SOLF have been a bit choppy over the last 6 months while the long-term trend has been higher. The 52-week high just shy of $9 is close at hand, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
