Tag Archives: stocks

SunEdison Bankruptcy May Torch $20.9 Mil Owed Trina Solar, JA Solar

SunEdison’s bankruptcy could incinerate $20.9 million owed to Chinese suppliers JA Solar ( JASO ) and Trina Solar ( TSL ), Credit Suisse analyst Patrick Jobin noted Monday, as the U.S. Bankruptcy Court granted SunEd some relief. Under SunEd’s Chapter 11 bankruptcy , filed Thursday, the solar developer will be allowed to pay employees wages and benefits, work on continuing projects and make “certain vendor payments,” SunEd said in a press release. But the ruling doesn’t specify whether SunEdison will make payments on about $322 million owed to trade suppliers, ranging from polysilicon production to cell/module suppliers. In total, SunEdison owed $11.7 billion as of Sept. 30, the company’s last financial filing. JA Solar and Trina Solar are among SunEd’s suppliers of solar cells and solar modules. SunEdison owes the duo $10.4 million and $10.5 million, respectively, Jobin wrote in a research report. “These are not trivial amounts, potentially impacting full-year earnings 6.6%-11.8% in a ‘worst case’ scenario of not receiving payments,” he wrote. He estimated Trina Solar’s earnings per share could drop nearly 9 cents to 32 cents from 41 cents, and JA Solar could lose 18 cents on its earnings, falling to 43 cents from 61 cents. JA Solar and Trina Solar stocks split Monday on Wall Street. JA Solar stock closed up a fraction, with Trina Solar stock slipping a fraction.

Will Twitter Show A Reversal In User Declines With Q1 Earnings?

Under pressure from slowing user growth, Twitter ( TWTR ) is set to report first-quarter earnings after the market close Tuesday. It’s a busy week for social networking stocks, with Facebook ( FB ) reporting Wednesday and LinkedIn ( LNKD ) on Thursday. Twitter reports during a rough period for the company. Revenue growth has declined year over year for the past six quarters, and user growth has declined the past four quarters. Analysts polled by Thomson Reuters expect Twitter to report Q1 revenue of $607.8 million, up 39% year over year, with earnings per share minus items rising 43%, to 10 cents. RBC Capital Markets analyst Mark Mahaney said data from research firm ComScore was “slightly negative” for Twitter, indicating a slowdown in unique visitors from Q4. He also said a survey of ad professionals conducted by RBC and Ad Age showed mixed results for Twitter. “We are incrementally more cautious on the stock’s prospects as a result,” wrote Mahaney, who has a sector perform rating on Twitter stock and a price target of 23. Since Twitter reported Q1 2015 earnings that revealed trouble ahead, the stock has plunged to 17 from 51. Twitter stock closed Monday at 17.09, down a fraction. In Q4, average monthly active users at Twitter rose 9% year over year, to 320 million, about 3 million less than Wall Street had expected. The Q4 growth was the same as Q3. Growth has cooled from 18% in Q1 2015, 15% in Q2 and 11% in Q3. The slowdown continues despite a series of new features Twitter has rolled out in the past year, including video tool Periscope and Moments. The company has overhauled management, starting with the return of co-founder Jack Dorsey as CEO in October. Dorsey is also the founder and CEO of payment processing firm Square ( SQ ). Facebook Q1 earnings come after the close Wednesday. The consensus on Facebook revenue is $5.25 billion, up 48%. Analysts expect EPS ex items to hit 62 cents a share, also up 48%. LinkedIn reports after the close Thursday. The stock bombed 44% to a three-year low after LinkedIn posted Q4 earnings on Feb. 5, as Q1 guidance widely missed estimates. LinkedIn acknowledged that a reshuffling of product strategy will impact short-term revenue growth in favor of the long term. The consensus on revenue is $829.5 million, up 39%. EPS is figured at 60 cents, up 5%.

Steel Makers Show Their Mettle; Stocks Rise Sharply

Close watchers of the stock market witnessed a rotation out of conservative, dividend-paying utilities and REITs during the past week. The fresh cash seems to be going into steel makers, machinery and related companies. Rotations occur seemingly spontaneously when money managers decide one group has risen enough and sell, redeploying the cash elsewhere. Investors should watch the rise and fall of IBD’s 197 industry groups for clues about rotation. Steel makers are the No. 3 industry group based on six-month performance, up from No. 175 three months ago. A look at the charts of some of the leading steel companies shows a sudden run-up. Several have risen almost uninterrupted this year. Steel is a cyclical industry, so an improvement in earnings and stock price could foresee an improvement in the manufacturing sector. Steel Dynamics ( STLD ), a leading member of the group, is not far from making multi-year highs despite a 47% decline in 2015 earnings per share. Last week, it reported that Q1 earnings rose 53% from a year earlier. Analysts expect EPS to nearly double this year. The stock has gained nearly 60% since a Jan. 20 intraday low but is hitting upside resistance near 25. The stock is just 4% below a September 2014 peak of 25.15. Domestic steel makers have been pinched by falling prices resulting from a supply glut and from cheaper imports resulting from a rising dollar. CEO Mark Millett told analysts that overall demand in the first quarter was unchanged with heavy equipment, agriculture and energy markets weaker and automobiles and construction were stronger. Meanwhile, Steel Dynamics’ scrap recycling business swung from an operating loss to a profit. U.S. Steel ( X ) once produced two-thirds of all U.S. steel. It stock has rebounded 200% since late January. But the profit picture isn’t so rosy. It lost money last year and is expected to lose even more money this year. Shares of Nucor ( NUE ), the nation’s largest steel producer, has risen 45% since late January. After four quarters of declining EPS growth, it posted a 28% increase in Q1 to 23 cents a share. Analysts expect a 33% increase to 48 cents in the current quarter and a 14% rise this year. Steel producers are part of the metals sector, ranked No. 3 out of 33 sectors. The sector has risen 15% year to date through Monday’s IBD. A single stock in the sector makes the cut as stocks with EPS and Relative Strength ratings of 80 or above with an IPO in the last 15 years. That’s  RBC Bearings ( ROLL ), which is part of the No. 5 metal processing and fabrication industry group. The company makes precision ball bearings used in aircraft and industrial applications. In near lock-step with the steel companies, the stock began a sharp recovery in January that has carried it 37% higher since January. The company has experienced moderate but steady growth in recent years. Revenue growth has accelerated from 0% to 26% to 32% to 36% in recent quarters.