WRAPUP 1-First Solar Germany rebate plan sends shares down

* First Solar 2nd-qtr profit, revenue tops Street

* Offering rebates in Germany to defend market position

* Stock falls 3 pct following rebate announcement

* Evergreen Solar Q2 loss before items misses Wall St view

* Evergreen shares down 10.5 pct in extended trade

By Nichola Groom and Matt Daily

LOS ANGELES, July 30 (Reuters) - First Solar Inc (FSLR.O) on Thursday reported a quarterly profit that handily topped Wall Street estimates, but its shares tumbled in extended trade after the company said it would start offering rebates to defend its position in Germany, the world's top solar market.

The solar panel maker's shares soared more than 10 percent immediately following the results but reversed course to fall 2.2 percent after the rebate program was outlined during a conference call with analysts.

Also, smaller U.S. solar company Evergreen Solar Inc ESLR.O reported a worse-than-expected quarterly loss as lower selling prices offset rising sales volumes. Its shares were down more than 10 percent after hours.[ID:nN30376045]

Evergreen also announced it had signed agreements with Jiawei Solarchina Co Ltd to build a 100 MW manufacturing plant in China, using its products, to cut costs.

Tempe, Arizona-based First Solar has weathered the global recession better than Evergreen Solar and other peers because its cadmium telluride panels are cheaper to produce than the silicon-based panels that dominate the market.

A dearth of financing for renewable energy projects, however, has contributed to a global glut of solar panels that has sent prices tumbling and chipped way at First Solar's competitive edge.

To defend his company's market position in Germany, Chief Executive Mike Ahearn said First Solar would offer rebates to customers once solar installations were completed.

"We're the cost leader in the industry by a wide margin, and we're going to do what we have to do," Ahearn said, adding that the duration of the program would be "flexible" and depend on market conditions. "We're willing to reduce price so long as, but not beyond when, it's necessary."

Analysts said the announcement was disappointing following the stellar results the company posted in the second quarter. Many had been expecting First Solar to raise its full-year revenue view, which it held steady. In addition, its gross margin outlook was below many analysts' estimates.

"They say they're doing it through a rebate program, but it doesn't matter what you call it, they still have to cut prices," said Kaufman Bros analyst Theodore O'Neill. "Their best quarter is the one they just did. The margins will only get worse from here."

First Solar said it still expects 2009 revenue of $1.9 billion to $2 billion and gross margins of 31 to 33 percent.

Second-quarter net income was $180.6 million, or $2.11 per share, compared with $69.7 million, or 85 cents per share, a year ago[ID:nN30351001].

Wall Street analysts, on average, had been expecting earnings of $1.65 per share, according to Reuters Estimates.

First Solar shares fell 3.3 percent to $167.79 in extended trade after closing at $173.55 Thursday on the Nasdaq.

Marlboro, Massachusetts-based Evergreen Solar will invest $17 million in cash and equipment for the plant that will begin production in the first half of 2010, and receive $33 million in loans from the Wuhan government's Hubei Science & Technology Investmen Co.

The Chinese government recently said it would subsidize half the investment for solar power projects as part of an effort to grow its renewable power output.

"Unless the world changes in a dramatic way, our plan is to expand in China," Richard Feldt, Evergreen chief executive officer told a conference call.

Evergreen shares fell to $2.13 after hours after closing at $2.38 on the Nasdaq. (Additional reporting by Laura Isensee in Los Angeles) (Reporting by Nichola Groom; Editing by Steve Orlofsky, Bernard Orr)