By Alex Morales and Ben Sills
May 6 (Bloomberg) -- First Solar Inc., the world’s largest
maker of thin-film solar power modules, may outperform Chinese
competitor Suntech Power Holdings Co. because it bought more
protection against the falling euro, Barclays Capital said.
An average exchange rate this year of $1.25 per euro would
probably depress earnings per share for Tempe, Arizona-based
First Solar by 9 percent relative to a $1.35 rate, Barclays
Capital analyst Vishal Shah said today in a note to investors.
For Suntech, the world’s largest maker of polysilicon solar-
power modules, the decline would be 79 percent, he wrote.
First Solar “has a relatively good hedging policy” against
swings in currencies such as the euro, Shah wrote.
The euro this year has dropped more than 11 percent against
the dollar and today fell to $1.2713, the lowest since March
2009. That puts companies that make most of their revenue in
euros at a disadvantage, Barclays Capital said.
“Most Chinese solar module companies could be vulnerable
to further euro-related earnings declines,” Shah wrote. “The
recent sharp decline in the euro has triggered a sharp sell-off in the solar sector.”
SunPower Corp., based in Wuxi, China, may see earnings per
share 21 percent lower with a $1.25 exchange rate than with one
of $1.35, Barclays Capital said. For JA Solar Holdings Co., the
decline would be 14 percent; Yingli Green Energy Holding Co.
would see a fall of 42 percent; and earnings per share at Trina
Solar Inc. may decline by 32 percent, the analyst said.
Canadian Solar Inc., which moved its headquarters to
Ontario from China’s Jiangsu province in September, may see a
drop of 84 percent, Barclays Capital said. Canadian Solar Chief
Financial Officer Arthur Chien said in a statement on April 20
that the euro had depreciated “dramatically” and the company
“did not have adequate currency hedging.”
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