August 12, 2009 / 2:59 PM / 9 years ago

ATS Automation shares slump on weak solar earnings

* Analyst sees solar industry oversupply for 3 years

* Stock down 10 pct at C$4.38 after sagging 15 pct

VANCOUVER, British Columbia, Aug 12 (Reuters) - Shares in ATS Automation Tooling Systems Inc (ATA.TO) fell 15 percent on Wednesday after its solar equipment division reported weaker than expected quarterly results and a tepid outlook.

ATS stock fell as low as C$4.16 on the Toronto Stock Exchange, a drop of 72 Canadian cents. By mid-morning it was off its lows at C$4.38, down 50 Canadian cents or 10 percent.

ATS’s Photowatt Technologies division, which makes solar ingots, wafers, cells and panels, reported a 42 percent drop in revenue to C$40 million ($37 million) as the solar market remained weak through oversupply and a lack of funding.

Daniel Kim, an analyst at Paradigm Capital in Toronto, said he believes the solar industry will be oversupplied for at least the next three years.

As a result, his earnings estimates and “buy” recommendation on ATS “will likely have a downward bias”, he said.

Its other division, the Automation Systems Group, which makes automated manufacturing and assembly systems, reported a 19 percent drop in revenue because of a weak economy and tight credit markets.

Early on Wednesday, ATS reported net income of C$325,000, or breakeven per share, compared with C$12.9 million, or 17 Canadian cents a share, in the year-ago quarter. Revenue fell 28 percent to C$152.7 million. [ID:nBNG535484]

$1=$1.09 Canadian Reporting by Nicole Mordant; editing by Rob Wilson

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