When I wrote about solar cell maker China Sunergy's (NASDAQ:CSUN) plunge last month, little did I know that there was another big drop waiting right around the corner. I'd say this has been a roller coaster of a stock, but that would necessitate ups and downs.

On Friday, the firm released its second-quarter earnings results, which were already pre-announced to some degree. One might surmise that there was no surprise. One would be so very, very wrong.

The resignation of a CFO tends to be rather abrupt, so that key executive's departure was definitely news to investors. This kind of event really tends to shake market confidence, but it isn't necessarily the worst news to come out on Friday. A new CEO recently came aboard, and it appears that his supply-chain management and procurement background makes him a very appropriate choice for a firm struggling to secure raw materials.

It's not altogether strange, then, that a new leader might want to clean the deck -- especially if the last team completely flubbed its sales forecast. In July, the company estimated quarterly solar cell shipments of "approximately 19.0 MW." On Friday, that figure suddenly became 15.8 MW -- a nasty 17% whiff. I think that egregious error explains a lot of the management reshuffle we're seeing now.

Even though volume shipments were quite wide of the mark, revenue came in right around expectations.

It was earnings that didn't even come close. Analysts were expecting a modest profit, which in hindsight is sort of unbelievable, looking at the firm's 5% gross margin.

When your silicon and other materials cost about 95% of your revenue, that doesn't leave a whole lot of room for profits. SunPower (NASDAQ:SPWR), Evergreen Solar (NASDAQ:ESLR), and Suntech Power (NYSE:STP) all recently reported quarterly gross margins in the 20% range, while First Solar (NASDAQ:FSLR) has doubled that figure. I wish the new CEO the best of luck, as it looks like he has a lot of ground to make up between his company and its hot competitors.

More sunny Foolishness:

  • China Sunergy was already clearly getting squeezed last month.
  • First Solar is flying high, but a simple valuation makes me skeptical.
  • Just how many solar IPOs can the market handle, anyway?

Fool contributor Toby Shute doesn't own shares in any company mentioned. Suntech Power is a Rule Breakers recommendation. The Motley Fool's disclosure policy believes that sunshine is the best disinfectant.