(Adds details, quotes from conference call, byline, updates share activity)
LOS ANGELES, July 17 (Reuters) - Evergreen Solar Inc ESLR.O on Thursday reported a wider quarterly loss due to costs for the opening of a new production facility and forecast third-quarter results that fell short of Wall Street estimates, sending shares down more than 11 percent.
The solar power company also warned that gross margins would be hurt for the rest of the year due to costs for bringing its new plant online, such as for training employees.
“The margin issue arises because our shipments are but a fraction of the factory capacity, while we have most of the at-capacity number of people,” Chief Executive Richard Feldt said on a conference call with analysts.
Evergreen’s second-quarter net loss was $8.9 million, or 8 cents per share, compared with a net loss of $7.5 million, or 9 cents per share, a year ago.
Wall Street analysts, on average, had been expecting a loss of 10 cents per share, according to Reuters Estimates. Evergreen itself in April had also forecast a second-quarter loss of 10 cents a share.
In a statement, Evergreen said it recorded costs of $11.3 million in the quarter for the start-up of its new plant in Devens, Massachusetts and for the closure of its current facility in Marlboro, Massachusetts.
Evergreen said it will begin producing solar cells and panels at its Devens facility “within days,” and expects to near full capacity of about 20 megawatts per quarter in early 2009. An 80-MW expansion of Devens is also in the works.
Second-quarter revenue rose 48 percent to $22.8 million from $15.5 million, Evergreen said. The company had previously said it expected revenue between $21.5 million and $22.5 million.
Gross margins were 34.7 percent in the second quarter.
For the third quarter, Evergreen forecast a net loss of 10 cents a share. Revenue is expected to be between $24.5 million and $25.5 million.
Wall Street analysts, on average, had been expecting a third-quarter loss of 8 cents per share and revenue of $26.67 million, according to Reuters Estimates.
Gross margins in the third quarter are expected to be between 6 percent and 8 percent, improving to about 20 percent in the fourth quarter, Evergreen Chief Financial Officer Michael El-Hillow said on the call.
The company is expected to return to at least 30 percent gross margins by early 2009, El-Hillow added.
Evergreen shares have shed more than 18 percent of their value since hitting $12.64, their highest level since January, on June 23. Evergreen and other solar stocks have been hammered by concerns about changes in key government incentives for renewable energy in the United States and Spain and a weakening global economy.
Evergreen executives said on the conference call that the company did not have a lot of business in Spain, and was not very worried about changes in subsidies in that nation.
Evergreen shares fell to $9.17 after closing at $10.32 on the Nasdaq. (Editing by Carol Bishopric, Phil Berlowitz)
Our Standards: The Thomson Reuters Trust Principles.