Shares were up 20¢ each, or 15%, to $1.48, on volume of more than 2.5 million shares after reports that the company's new production facility in Germany -- to be completed in the next month or so -- will produce annual output of $375-million, or roughly three times the company's stock value as of Friday's close.

The rally in Arise's share price could be the beginning of a bumpy ride for investors as the company tries to shrug off a disappointing past few months, including last week's announcement that fiscal 2007 fourth-quarter results were below consensus estimates.

Fraser Mackenzie analyst John Safrance said the shortfall in revenues during the quarter was likely due to the amount of snow Ontario has received this winter, which has hampered rooftop solar installations. Although he expects the first quarter of 2008 to be even weaker, Mr. Safrance said he doesn't expect it to materially impact his full-year outlook, especially given the significant top-line growth that will coincide with the ramp-up in the company's solar cell production come April.

Because gross margins within the solar cell division will limit the company's drive to profitability, the analyst told clients the company's share price could still be negatively affected in the near term.

Alongside other world solar stocks, Arise shares have fallen by more than half since November.

"Investors seem to be understandably reticent to hold high beta/high growth stories in the current environment and we believe this has been reflected in the share price," Mr. Safrance wrote in a report.

But with some positive news flow over the next couple of months -- evidence of which was seen yesterday -- he said the company will likely decouple from the solar energy index and begin trading on its own merits.

He noted several expected positive milestones and announcements over the next eight weeks, including news that the company's polysilicon program will exceed current expectations.

"While the company 's short-term solar cell struggles are not lost on us, we believe the polysilicon division should prove extremely valuable in driving the underlying value in the company's share price," he said, maintaining his "strong buy" rating and $3.60 price target.

dpett@nationalpost.com