LDK Solar Co. & Humana Inc. Slumped After Earnings (NYSE:LDK, HUM)
With frail demands and steep fall in the selling prices, LDK Solar Co., Ltd (ADR)(NYSE:LDK), the Chinese firm, drooped into a third consecutive quarterly loss. This took a toll on the profit margins of the Company. The company has been recorded as the most recent company to witness destructive charges in view of mounting losses.
The solar industry being hit hard last year, LDK Solar, a major supplier of wafers and cells that are used to build photovoltaic panels, was no exception to incur losses. The companies that suffered losses last year were First Solar, Suntech Power Holdings, JinkoSolar Holding Co and Yingli Green Energy to name a few. With the prices of equipments that turn sunlight into electricity going down by half, LDK Solar had set a provision of $179.2 million for doubtful receivables and prepayments, citing a declining solar market which affected its customers and suppliers.
The company expects revenue of $190 million to $230 million for the first quarter, far below the market expectation of $397.2 million. Not only this, the company reported a loss of $588.7 million, or $4.63 per American Depositary Shares (ADS), in stark comparison to the profit of $145.2 million, or $1.09 per ADS in the year-ago period.
With delayed reporting in its fourth quarter results, the net sales of the company came to $420.2 million, reflecting a decline of 54%. The company recorded a negative gross margin of 65.5% for the quarter compared to positive 27.3% a year ago.
The analysts had estimated a loss of 85 cents a share, on revenue of $431.6 million.
Shares of LDK slumped 14.20% in pre-market trading.
Health Insurer Humana Inc. (NYSE:HUM) reported a fall of 21% in the first quarter profit. This happened as the company paid out more in claims and augmented spending anticipating growth in its lucrative Medicare Advantage membership.
The company bumped up its earnings expectations for the full year to a range of $7.55 to $7.75 per share, up from its prior forecast of $7.50 to $7.70 per share.
With its individual Medicare Advantage membership growing to nearly 1.89 million as of March 31, up by 15% from the end of last year, the company increased its investment in anticipation of further gains. Group Medicare Advantage membership was up 21% to 385,800 as of March 31.
For the first quarter, the company reported net income of $248 million, or $1.49 per share, highlighting a fall from $315 million, or $1.86 per share, in the same period last year. Analysts had estimated earnings per share of $1.52 on revenue of $10.14 billion. Though the revenue rose 11% to $10.2 billion.
Humana’s pre-tax profit in its retail segment fell to $115 million in the first quarter from $217 million a year ago. Pre-tax income in its employer group segment was $121 million in the first quarter, compared to $139 million a year ago.
Shares of HUM are down 4.925 to $83.50 in the pre-market session.