UPDATE 2-Energy Conversion Devices Q3 profit beats Street view

(Recasts; adds details, analyst comment, updates share movement)

By Sakthi Prasad

BANGALORE May 8 (Reuters) - Energy Conversion Devices Inc ENER.O swung to a quarterly profit, beating Wall Street view, on higher demand for its solar products, and forecast a fourth-quarter revenue range whose lower end was in line with market expectations, making its shares the biggest percentage gainer in Nasdaq.

"The driver of this big beat is the gross margins and was driven by the fact that they had better utilization of their factory," analyst Paul Clegg of Jefferies & Co, who termed Energy Conversion as a turnaround story that is gaining momentum, said from New York.

Gross margin on product sales in the solar business was 30.7 percent in the third quarter, compared with 19.2 percent in the second quarter, driven by better factory utilization and yield.

"One of the problems of the company in the past was it tended to be very focussed on new R&D and less on commercialization, and the new CEO executed a plan to streamline the organizational structure by getting rid of what we would term as wasteful R&D business," Clegg, who has a "buy" rating on the stock, said.

The company's principal commercial products are its thin-film photovoltaic solar modules, which convert sunlight into electricity, and are sold globally.

Energy Conversion manufactures a type of photovoltaics, which can be built into the structure of a building, called as Building Integrated Photovoltaics or BIPV for short.

Solar companies have enjoyed rapid growth in recent years due to increased interest in sources of renewable energy and concerns about climate change. Earlier this year, however, many solar stocks took a beating due to concerns about a weakening U.S. economy.

TURNAROUND QUARTER

For the third quarter, the alternative energy technology company, earned $7 million, or 17 cents a share, compared with a net loss of $6.9 million, or 17 cents a share, a year ago.

Total consolidated revenue more than doubled to $70 million, while that of its solar products rose 193 percent to $64.9 million.

Analysts, on average, expected the company to breakeven during the quarter, excluding items, on revenue of $66.7 million, according to Reuters Estimates.

"Demand for our products continues to exceed available supply, and we are emphasizing take-or-pay agreements which give us better forward visibility, while ensuring supply to our strategic channel partners," Chief Executive Mark Morelli said in a statement.

The company said it expects fourth-quarter revenue of $73 million to $78 million.

Analysts are expecting fourth-quarter revenue of $73.0 million, according to Reuters Estimates.

Shares of the company were trading up 38 percent at $47.82 in noon trade on Nasdaq.

However, shares of its peer Akeena Solar Inc AKNS.O, which also reported its quarterly results on Thursday, were down 16 percent at $5.56 as its loss widened due to higher operating expenses and it warned of a weaker demand for the rest of the year. (Editing by Jarshad Kakkrakandy)