Power-One, Inc. (PWER)

[eastunder]

Power One outlook pleases investors, shares up

Thu May 5, 2011 5:32pm EDT

* Power One Q1 share $0.20 vs $0.21 view

* Second-quarter, FY rev views assuage investor concerns

* Stock up 6 percent after hours (Adds analyst comment, background, share activity, byline)

By Nichola Groom
LOS ANGELES, May 5 (Reuters) - Power One Inc (PWER.O), which makes inverters for the solar power industry, reported sharply higher quarterly earnings on Thursday and offered a revenue forecast that assuaged market concerns about a build-up of inventories, sending its shares up 6 percent.

Net income was $30 million, or 20 cents per share, compared with $4 million, or 4 cents per share, a year ago.

Wall Street analysts, on average, were expecting earnings of 21 cents per share, according to Thomson Reuters I/B/E/S.

Total sales rose 60 percent to $244.5 million from $152.4 million a year ago.

Sales were in line with a reduced outlook the Camarillo, California company offered in early April. At the time, Power One said an expected cutback in solar incentives in Italy had hampered demand during the period.

Looking ahead, Power One forecast revenue of $250 million to $270 million for the second quarter. Wall Street was expecting $271 million, according to Thomson Reuters I/B/E/S, but one analyst said investors were cheering the outlook.

"There is some inventory in the channel that had investors concerned that second quarter guidance would be substantially lower than expectations," ThinkEquity analyst Colin Rusch said. "This is clearly a better-than-feared guidance."

Rusch has a "buy" rating on Power One shares.

For the full year, Power One forecast revenue of $1.1 billion to $1.25 billion, in line with Wall Street's average view of $1.12 billion, according to Thomson Reuters I/B/E/S.

Like many in the solar industry, Power One shares have been battered this year by concerns about declining incentives for solar power in Italy. But that nation approved its long-awaited decree on Thursday, ending a period of uncertainty for solar manufacturers, developers and investors. [ID:nNLDE7440Z]

"We anticipate the solar market will begin to gain momentum as Italy recently passed its legislation and the German market is showing signs of heightened activity," Power One Chief Executive Richard Thompson said in a statement.

Power One shares rose to $8.41 in extended trading after closing at $7.93 on the Nasdaq. The stock has lost 22 percent of its value this year. (Reporting by Nichola Groom; editing by Tim Dobbyn and Andre Grenon)