Solar Energy ETFs Go Dim As Makers Lose Money

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Prospects for solar energy ETFs grew even dimmer Thursday as Chinese solar equipment makers reported second-quarter losses and cut their full-year shipment estimates on fears Europe will slap them with anti-dumping tariffs.

The concerns follow accusations that they dumped cheap products amid a global supply glut and weak demand. The U.S. earlier this year imposed tariffs on major Chinese exporters, includingYingli Green Energy ( YGE ) andJA Solar ( JASO ), at about 31%, Reuters reported.

Guggenheim Solar ( TAN ) plunged 5.13% Thursday, whileMarket Vectors Solar Energy ETF ( KWT ) tumbled 4.75%. The largest holding in both ETFs,First Solar ( FSLR ), plummeted 16.49%. Solar stocks have been trending lower the past four years as China's low-cost manufacturing flooded the market and drove down prices, eroding profits and sending some companies out of business.

First Solar stopped deliveries to the world's largest photovoltaic power plant in Arizona, Bloomberg reported Thursday. The halt is meant to slow down construction to meet contractual guidelines at the plant, which was being built faster than planned. The solar farm is 85% completed and is scheduled to be finished at the end of 2013.

Yingli shares dropped 10% upon reporting a third straight quarterly loss due to a sharp fall in panel prices. It lost 58 cents a share in the second quarter. Sales fell 28% year over year to $488.4 million. It cut its estimate for a module shipments increase to 31% to 37% year over year vs. prior guidance of a greater than 50% increase.

"In addition to the challenges from feed-in tariff adjustments, excessive module supply and the ongoing anti-dumping and countervailing investigations in the U.S., the anticipated anti-dumping investigation in the European Union has brought more pressure and uncertainties to the solar industry," Yingli Chairman and CEO Liansheng Mia said in media statement.

ThinkEquity and RBC cut their price targets.

JA Solar -- one of the world's largest solar makers -- posted a fifth straight quarterly loss Wednesday owing to weak solar panel prices. The net loss nearly doubled to 37 cents a share following a 20-cent loss the prior quarter. Sales fell 31% year over year to $284.4 million. RBC cut its price target while rating it sector perform. Shares fell 0.73% after tumbling 10% Wednesday. For the full year 2012, Yingli expects total cell and module shipments to be between 1.5 and 1.8 gigawatts vs. prior estimates of 1.8 to 2.0 GW.

"While we recorded a loss for the quarter due to the unfavorable pricing environment, we continue to actively manage costs and operating expenses and have one of the strongest balance sheets in the industry," said Dr. Peng Fang, CEO of JA Solar, in a statement.

TAN plummeted 29% year to date and 66% in the past 12 months. KWT has fallen 30% year to date and 66% in the past 12 months.

Follow Trang Ho on Twitter @TrangHoETFs .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , ETFs

Referenced Stocks: FSLR , JASO , KWT , TAN , YGE

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