GT Solar Squeezes Higher on Share Buyback

GT Solar International Inc. (SOLR) squeezed higher this morning, printing the highest intraday price since October 2008 ($10.00 +$1.16), after the company boosted its full-year earnings and agreed to repurchase shares from private investors for about $203 million.

The supplier of equipment to solar manufacturers said in a press release that it agreed to buyback 26.5 million shares of its common stock currently held by GT Solar Holdings, which is controlled by the co.’s private equity investors, GFI Energy Group and Oaktree Capital Management.

Under the terms of the agreement, SOLR will buy back the stock for $7.66 a share with the repurchase  expected to close on or before Nov. 12, 2010. As a result of the trade, which will be funded with cash on hand, the co.’s shares outstanding will be cut to 124 million from 150 million.

GT also said it now sees EPS for fiscal 2011 beyond what was reported in the Q2 fiscal 2011 earnings release issued on Nov. 5, 2010. For the March 2011 fiscal year the Merrimack, New Hampshire – based GT sees EPS ranging from $1.08 to $1.18 a share, up from a range of $1.00 to $1.10.

On Friday, SOLR posted revenue for the 2Q totaling $229.3 million, nearly 70% growth over $135.2 million in Q1 of fiscal 2011, with profits of $0.28 a share vs $0.11 for the 1Q of 2011 and $0.06 for the 2Q of fiscal 2010 ; the Street’s consensus was for $199.2 million in revs and $0.24 a share.

From e technical perspective, GT has displayed a relatively large range of volatility since August along the $7.00 – $8.50 area. The security did in mid-October climb above the $9.40 level with the support of its ascending 50-day moving average located in the $8.24 area. However, the equity managed today to climb back above its mini-breakout zone recorded during the second week of October and print a $10 PPS.

In the last 52 weeks shares of GT have managed to accumulate an impressive 68.70% gain.

In terms of GT’s key ratios ; it’s hard not to find favorable trends occurring in the co.’s numbers. SOLR’s profit margin trailing12 currently stands at nearly 16% ;  operating margin prints at 25.60% while quarterly revenue growth stands at nearly 89%. On its balance sheet GT reflects $277 million in total cash for mrq with zero total debt.

Share Action: Shares of GT Solar are higher on the session by 65 cents, or 7.03%, currently trading at $9.49. The stock’s 52wk range is between $4.51 – $10.00.

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About Ron Haruni 1070 Articles
Ron Haruni is the Co-Founder & Editor in Chief of Wall Street Pit.

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