Energy Conversion Devices, Inc. (ENER) reported awesome fourth-quarter and full-year results yesterday morning that included very impressive growth in both its revenue and profits. Analyst are bullish on the company, with the next-year estimate projecting 450% earnings growth.

Energy Conversion Devices, Inc. develops materials, products and processes for alternative energy generation (think Solar) and storage. The company was founded in 1960, has a market cap of $3.15 billion and is headquartered in Rochester Hills, Michigan.

A Profitable 4th Quarter

With alternative energies being all the fashion in today’s social and economic environment, Energy Conversion Devices was able to swing to an impressive fourth-quarter profit, as reported yesterday, Aug 28.

Revenue more than doubled from last year, increasing to $82.4 million. Net income was up big, moving back into the green and coming in at $9.9 million, up from a loss of $13.1 million last year. This produced earnings of 24 cents per share, ahead of analyst estimates of 16 cents per share.

During the call, the company noted that its gross margin on solar products grew to 33.5% from 30.7%, and that its sales pipeline had grown 50% to $1.8 billion.

Impressive Full-Year Results

Consolidated fiscal 2008 revenue totaled $255.9 million, a sharp increase from the 2007 total of $113.6 million. Net income for the year jumped to $3.9 million, up from a loss of $25.2 million in the year prior period.

Bullish Guidance

Energy Conversion Devices provided a very bullish forecast to the Street, projecting first-quarter revenue between $95 and $98 million, and full-year revenue between $455 and $485 million.

Going into the quarterly report, analyst had been projecting current-year earnings of 26 cents per share and a very bullish next-year earnings projection of $1.45 per share. Based upon these projections, this stock carries very high valuations, with a forward P/E multiple of 225X

The Chart

Shares of ENER are up big on the year, gaining more than 200% in value while climbing from less than $25 to the recent high above $75. As it stands, this stock is pressuring a key level of resistance at the high. With prices this high, this company will need to deliver robust earnings to support more share appreciation.

Content Courtesy: Zacks Investment Research

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