GT Solar (NASDAQ:SOLR) hasn't fired the imaginations of too many investors, judging by the equipment provider's share price relative to its 2008 IPO. In fact, fellow Fool Rick Munarriz calculated it to be the second-worst surviving IPO of the year, after Verso Paper (NYSE:VRS). Late-year layoffs in the firm's photovoltaic business were a fitting coda to a crummy year.
On second thought, maybe it wasn't so crummy after all. GT Solar's fourth-quarter numbers are out, and they're shockingly strong.
Revenue ratcheted up 46% sequentially, to $205 million, while per-share earnings climbed 58%. Gross margins held steady while operating margins ticked up a bit.
Upon closer inspection, GT Solar's business is incredibly lumpy. Last quarter, the firm recognized zero revenue in its polysilicon segment, which primarily provides chemical vapor deposition reactors. This quarter, GT reported $95.8 million of sales on the poly side, and more than 95% of that came from a single order with DC Chemical!
I now understand why people totally freaked when LDK Solar (NYSE:LDK) signed a deal with one of GT's competitors last July. These are high-stakes sales when you're talking about such serious customer concentration.
A corollary to my customer concentration concerns is the fact the in-house equipment supply enjoyed by all the incumbents in the upstream solar biz, from Hemlock to REC Group to MEMC Electronic Materials (NYSE:WFR). That leaves GT Solar reliant on new entrants, of which LDK and DC Chemical are two of the more established. So throw customer mix into the mix as well.
The most redeeming quality here has to be the balance sheet. While Suntech Power (NYSE:STP), Solarfun Power (NASDAQ:SOLF), and ReneSola (NYSE:SOL) have all run up significant debt loads, GT Solar's balance sheet is clean as a whistle. That should help the firm tough out difficult quarters -- including as the current one, in which revenue is projected to fall to the $140 to $170 million range.
