Power-One, Inc. (PWER)

[eastunder]

Power-One shares fall despite strong 2nd-qtr results boosted by strength in Europe

Associated Press – Fri, Jul 27, 2012 3:12 PM EDT.. .

http://finance.yahoo.com/news/power-one-shares-fall-despite-191218159.html

NEW YORK (AP) -- Shares of Power-One Inc., which makes equipment used in solar panel systems, lost steam Friday after investors weighed the company's long-term struggles against its strong second-quarter results and bright outlook for the current quarter.

The stock rose as much as 20 percent after the results were released Thursday and opened 5.5 percent higher Friday. But shares turned lower Friday afternoon, along with shares of several other solar equipment makers, as investors fretted over the strength of demand in Europe as more countries there fall into recession.

The Camarillo, Calif., company attributed the 52 percent gain in its net income to the solar market in Europe.

Profit came to $46.7 million, or 30 cents per share, in the three months through July 1, compared with $30.8 million, or 21 cents per share, a year earlier. Revenue jumped 24 percent to $321.5 million.

Analysts polled by FactSet had had much lower expectations, predicting profit of 12 cents per share on revenue of $250.3 million.

Power-One shipped 1.2 gigawatts of inverters for solar panels in the spring quarter, driven in particular by European businesses installing rooftop solar systems.

For the current quarter, Power-One expects a smaller revenue increase than in the second quarter as demand in Germany and Italy moderates. It predicted that revenue will rise 10 percent from a year ago, to $260 million to $280 million. Analysts had projected revenue of $239 million.

But overall, demand for solar is dropping in Europe after cash-strapped governments cut renewable energy subsidies.

Cantor Fitzgerald analyst Dale Pfau said he considers Power-One's "spectacular" quarter a reflection of a demand spike before further subsidy cuts in Europe. While Power-One is gaining market share, the company still expects revenue from Europe, which made up 91 percent of revenue in the second quarter, to drop next year. And he said it's struggling to ramp up its U.S. manufacturing.

Shares shed 24 cents, or 5 percent, to $4.64 in afternoon trading Friday. They've lost about 35 percent of their value over the past 12 months, but have rebounded 25 percent in 2012.