The Co announced its earnings report after market and was very forward-looking, as expected. In addition to major contracts with companies from China and Germany, Hoku reiterated its deal with Hawaiian Electric. Hoku also announced plans to increase the size of its polysilicon plant in Pocatello, Idaho. Traders didn't feel the optimism, taking HOKU down as low as $10.05 in after hours. HOKU had closed the day up 12 cents to $11.27. Here's an exerpt from today's press release:
Dustin Shindo, chairman, president and chief executive officer of Hoku Scientific, said, "We couldn't be happier with the strides made in our polysilicon and solar businesses over the past several months. Without question, the most significant news is the signing of polysilicon supply agreements with Suntech and Solar-Fabrik. These contracts along with our contract with SANYO may result in aggregate payments to us of up to approximately $1.2 billion over ten years."
"Based on these agreements, we intend to increase the planned size of our polysilicon plant by up to 1,000 additional metric tons of annual capacity. We expect that the cost will be greater than $260 million, which was the estimated cost for a 2,000 metric ton per year polysilicon plant, but we have not yet determined an estimated cost. We intend to use the over $211 million in advance payments from our polysilicon agreements to contribute to the financing of the construction, subject to our achievement of various polysilicon production and quality milestones. We plan to cover the remaining construction costs through debt and/or the issuance of equity securities.
Revenues for the fiscal year ending March 31 of 2008 will be down, Shindo added, due to the pullout from solar module manufacturing. Estimates of $7-10 million were pared down to $3-6 million.
For Hoku bears, it's more of the same; optimism and talk. For Hoku bulls, confirmation that the wheels are spinning and Shindo is highly progressive — perhaps aggressive, as well.
When the short-term trading shakes out, will this be a buying opportunity for the bulls? HOKU is trading below $11 for the first time since July 5.
EdgarOnline: Hoku Scientific 8-K.
Disclaimer: Pupule Paul is a skosh long HOKU.
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