Earnings Of Cleantech Companies Set Stage For Boost In Investor Sentiment

Solar titan First Solar sent dark clouds over the cleantech markets last week when quarterly earnings fell by almost a third.

Yesterday, skies cleared when JA Solar’s latest financial report beat Wall Street’s estimates with a nearly 90% rise in quarterly net income, even though Energy Conversion Devices conceded its third quarter sales tumbled 70%. Layoffs are on the way at the struggling amorphous silicon vendor Energy Conversion and CEO Mark Morelli is gone.

Earnings at publicly held cleantech companies seem all over the map. But in aggregate they paint a more consistent, upbeat picture than might be imagined.

This observation is found in a new study from Ernst & Young, which calculated that net income at public cleantech companies rose 126% in 2010, despite the global economic downturn.

During the same 12-month period ending September 2010, revenue rose smartly as well, by 21% to $153 billion.

The report should offer some relief to investors wondering if cleantech investing is a sustainable and lucrative alternative for portfolio cash. And it could pave the way for an expected stream of cleantech IPOs this year. Already, solar thermal plant developer BrightSource Energy has filed an S-1, and other industry leaders, including LED lighting manufacturer Bridgelux, appear close to following suit.

The study finds that market capitalization for cleantech companies increased an impressive 27% in 2010, in part because of additional companies going public.

Nevertheless, Ernst & Young offers a warning to U.S. policy makers and entrepreneurs. The Asia-Pacific region boasts the largest number of companies, 149, and revenue for them grew a strong 44%. European companies have the most sales – $73 billion – and the region accounts for the second largest number of companies, 128.

North America has 117 public cleantech companies, trailing both. Clearly a comprehensive, progressive energy policy is needed in the states – but of course you knew that before this report was published.