Phoenix Solar, one of First Solar’s (FSLR) biggest customers said today that it was lowering its 2009 guidance for EBIT.
The company will still be EBIT positive for the year, and it’s not changing its revenue projections, but this is enough for Hapoalim Securities analyst Gordon Johnson to advise clients (via Barron’s) to sell First Solar.
Here’s why is Phoenix lowering its guidance, again via Barron’s:
The reason for this assessment is the continuing decline in prices, particularly for solar modules, resulting in downward pressure on margins, buying resistance on the part of customers, and an increased devaluation requirement for current inventories,” Phoenix Solar said in a statement. “Until now, based on various signals, the Board of Directors had expected that price declines had reached their lowest point and that earning situation would recover. These expectations were not confirmed.”
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