Why Hanwha SolarOne Co Ltd's Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of solar manufacturer Hanwha SolarOne Co Ltd dropped as much as 18% in early trading after the company reported earnings.

So what: Third quarter revenue was down 4% sequentially to $185.5 million on the back of a 1.1% drop in shipments. Gross margin actually fell slightly to 5.1%, which resulted in a net loss of $75.2 million, or $0.89 per share.

Now what: At a time when most solar companies are improving both the top and bottom line, Hanwha SolarOne is going backwards. This is despite 46% of shipments going to Japan, a very high margin market for the solar industry. I'd stay away from this stock right now and look at profitable solar companies right now. Even Canadian Solar or Trina Solar in China provide a better option for investors.

A top energy stock right now
If you're looking for an energy company that's growing and making money, The Motley Fool's chief investment officer has hand-picked one such opportunity in our new report: "The Motley Fool's Top Stock for 2013." To find out which stock it is and read our in-depth report, simply click here. It's free!

The article Why Hanwha SolarOne Co Ltd's Shares Plunged originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.