You would think Energy Conversion Devices (NASDAQ:ENER) had gotten all the bad news out of the way with its mid-quarter warning. What could be worse than an earnings miss, layoffs, a temporary production halt, and an expansion slowdown? Try an even longer production shutdown.

That's exactly what ECD announced late last week, sending the shares on another unpleasant journey southward. Following on the "two-week production hiatus" announced in March, the company now expects a "three to four week furlough." ECD argues that demand for the firm's lightweight, flexible thin-film solar laminates is still there. The credit markets just aren't cooperating, with funds flowing like a vanilla shake from In-N-Out Burger. (If you didn't know, those suckers are stiff.)

For the quarter, ECD served up $60 million in solar product revenue, which was about as soft as promised. Though the company is realizing some pretty significant cost savings at this point -- Schlumberger (NYSE:SLB) isn't the only energy industry supplier being squeezed these days -- underutilization of production lines overshadowed those benefits, dragging solar gross margins down to 29%. That's still a stronger figure than many polycrystalline players are achieving, but far shy of First Solar's (NASDAQ:FSLR) 56% first-quarter gross margin.

Like Suntech Power (NYSE:STP) -- which now looks like it was ahead of the curve in setting its phasers to pause back in November -- ECD says that orders aren't being canceled, but delayed. A lot of once-solid take-or-pay contracts are being adjusted, with deliveries shifted to later periods. When pressed by one analyst, management acknowledged that it was "taking some pretty strong action in some cases," which suggests that they need to seek legal recourse with certain deadbeat distributors.

In order to address the pileup of inventories and get some product moving, ECD has followed the likes of Evergreen Solar (NASDAQ:ESLR) by pursuing a downstream partnership, in this case with Enfinity. The pair will co-develop and finance PV project installations, with the intent of selling them to investors within 18 to 24 months.

Circling back to those lower costs -- including a 15% drop in materials costs over the past nine months, and a targeted 20% drop in personnel costs next quarter -- ECD similarly echoed Suntech in citing the savings as a potential accelerator toward achieving grid parity. As bad as the company's visibility is today, there remains the promise of a sunnier tomorrow.