Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of solar stocks were on fire again today, continuing a strong run in 2013. SunPower (NASDAQ:SPWR), Trina Solar (NYSE:TSL), SolarCity (NASDAQ:SCTY.DL), and Yingli Green Energy (NYSE:YGE) all jumped more than 10% on a number of positive catalysts.
So what: SunPower said second-quarter revenue would be $550 million to $600 million and non-GAAP earnings per share will be $0.05 to $0.15 per share. Analysts were expecting $513 million in revenue and a loss of $0.02 per share.
Analysts at Nomura said they expect Trina Solar's second-quarter gross margin to bounce up to a range of 8% to 10%, from 1% to 3% in the first quarter.
In less positive news, Suntech Power had agreed with some bondholders on another forbearance agreement, which is an extension of its bonds due to June 28. The original due date was March 15, and at that time 60% of bondholders agreed on a two-month extension. Suntech needs some sort of lifeline to pay off these debts, and I don't see it happening.
LDK Solar finally reported fourth-quarter numbers today and said that sales fell 53% sequentially to $136 million and net loss ballooned to $515 million. LDK has $2.8 billion in debt to just $98 million in cash, and I doubt the company will survive much longer.
Now what: Solar stocks often trade in unison short-term, which is what happened today. SunPower's numbers were good, but SolarCity reported disappointing earnings yesterday and Trina Solar just reduced shipment guidance. Meanwhile, LDK and Suntech are circling the drain because they can't service massive amounts of debt.
I only see today's news as a positive for SunPower, which is expecting to pull into a profit during 2013. For the other companies, today's pop isn't worth buying.
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