Sunday, August 24, 2008

Weekend Beach Reading: August 25, 2008

AeroVironment (AVAV-$33.01), best known for its hand-launched, remote-controlled surveillance and reconnaissance aircrafts, is quietly gaining altitude in the wind power industry.

Despite record energy prices in the second-quarter, Anadarko Petroleum (APC-$$58.65) said its net income for the three-months ended June 30 fell 98 percent to $23 million,
due to $1.6 billion in derivative trading losses.

Green Plains Renewable Energy (GPRE-$6.85) is celebrating commenced production of ethanol at its new 55 million gallon per year facility in Superior, Iowa. If a bill introduced by Senator Kay Bailey Hutchison (R-TEX), and co-sponsored by eleven other Republican Senators-including John McCain –
that calls for freezing the corn ethanol mandate at 2007 levels of 4.7 billion gallons – becomes law this fall, the ethanol producer’s celebration could be short-lived.

National Oilwell Varco (NOV-$77.10) benefited from higher rig construction volumes in the second-quarter ended June 30, with its Rig Technology segment reporting a 49 percent year-on-year increase in operating profit of $506.4 million. Going forward, however,
higher material costs, such as steel for piping, could offset improved manufacturing efficiencies.

Suntech Power (STO-$46.75) said that 45 percent of its polysilicon, which accounts for about 70 percent of Suntech’s costs of goods sold, still came from the spot market in the second-quarter, and that ratio should remain the same for the rest of 2008. In a conference call with analysts, however, Chairman and Chief Executive Dr. Zhengrong Shi said
raw material costs as a percentage of total costs of goods sold are expected to decline at least 20 percent the coming year.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

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