LDK Solar’s Earnings Disappoint the Solar Sector (LDK, SOL, CSUN, YGE, JASI, TSL)
Solar Stocks were under selling pressure after 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 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 5% to $2.81 after hitting a new 52-week low of $2.54 earlier in the session.
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 Hold. Co. Ltd. (ADR)(NYSE:YGE) 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.
ReneSola Ltd. (ADR)(NYSE:SOL) fell 2.25% to $1.74, China Sunergy Co Ltd(NASDAQ:CSUN) lost 1.89% to $1.56, JA Solar Holdings Co., Ltd. (ADR)(NASDAQ:JASO) declined 2.20% and Trina Solar Limited (ADR)(NYSE:TSL) was down 1.55%. Yingli Green Energy Hold. Co. Ltd. (ADR)(NYSE:YGE) was down 2.23%.