Stocks in the Solar Sector Moving Lower as Yingli (YGE) Disappoints

Stocks in the solar sector are taking a bit of a hit today as Yingli Green Energy (NYSE: YGE) reported somewhat-concerning Q4 results earlier: adjusted EPS of $0.13 (missing views of $0.14) on revs of $370.8 million (killing the consensus of $326.46 million). Despite an outlook which has shipments nearly doubling (Yingli sees shipments of 950MW to 1GW in 2010, versus the 525.3MW shipped in 2009), traders are selling the stock today; shares of Yingli last traded around $12.16, down more than 5.6% from Friday's closing price.

Considering Yingli's outlook -- and today's sell-off in the stock -- investors may be using Q4 results (on February 18) from First Solar (Nasdaq: FSLR) as a proxy for Yingli's results today. The so-called solar "best-of-breed" beat on earnings and dominated revenues, however, their FY10 guidance turned out to be aggressive and the stock tumbled more than 15% over the next several trading days

Today traders in the solar sector seem to be betting that although more orders and deals may be in the works for providers, increasing prices and competition may thin out margins and net earnings. Could 2010 be both a year of growth and elimination for this cutthroat sector?

Other solar shares trading lower today include:

• Trina Solar Ltd. (NYSE: TSL) down 1.61% to $23.16;
  
• LDK SOlar Co. (NYSE: LDK) down 3.47% to $6.39;
  
• Claymore/MAC Global Solar Energy (NYSE: TAN) down 1.20% to $8.22;
  
• JA Solar Holdings (NASDAQ: JASO) down 1.96% to $4.96; and
  
• Solarfun Power Holdings (NASDAQ: SOLF) down 3.07% to $6.56.

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