JA Solar Holdings Co. Ltd.
) announced first quarter 2012 results. Adjusted loss per American
Depositary Share ("ADS") was 20 cents, wider than our expectation
of a loss of 15 cents. Results also came far below the year-ago
adjusted earnings per ADS of 43 cents.
JA Solar's revenues in the reported quarter were $254.4 million,
comfortably ahead of the Zacks Consensus Estimate of $229 million.
However, revenues decreased 56% from $578.5 million reported in the
first quarter of 2011.
Total shipments in first quarter of 2012 were 366MW, above the
company's previously provided guidance range of 320MW to 350MW.
However, it represents an 18.8% decrease from 451MW in the first
quarter of 2011.
Gross profit in the first quarter of 2012 was $5.3 million, far
below the year-ago figure of $100.1 million.
Total operating expenses in the quarter of 2012 were $30.5
million, compared with $13.5 million in the first quarter of
Operating loss in the quarter under review was $25.3 million
versus an operating profit of $86.6 million in the first quarter of
Other income in the first quarter of 2012 was $5.1 million,
compared with $8.6 million in the first quarter of 2011.
JA Solar at the end of the reported quarter had cash and cash
equivalents of $676.2 million as compared to $422.2 million at the
end of the first quarter of 2011. Total working capital at the end
of the quarter was $696.5 million as compared to $711.8 million at
the end of previous year quarter. Total short-term bank borrowings
were $153.8 million. Total long-term bank borrowings were $697.9
million, among which $226 million were due in one year. The total
face value of outstanding convertible bonds due 2013 was $220.7
JA Solar expects its cell and module shipments to be in the
range of 420MW and 440MW in the second quarter of 2012. For the
full year 2012, the company expects total cell and module shipments
to be between 1.8GW and 2GW.
As a result of tepid module demand in Europe, incurring losses
have become a trend for these solar companies. Recently, the
Suntech Power Holdings Co. Ltd.
) posted first quarter 2012 adjusted loss of 74 cents per American
Depository Share (EPADS), far wider than the Zacks Consensus
Estimate of a loss of 48 cents. The results were a stark contrast
to the year-ago adjusted earnings of 17 cents per share.
JA Solar is one of the most cost-efficient solar producers with
a geographically diversified customer base. However, the loss
incurred by JA Solar this quarter reflects industry-wide high
inventory levels, rising competition, and the oversupply of solar
cells in the market. The company presently retains a short-term
Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on
JA SOLAR HOLDGS (JASO): Free Stock Analysis
SUNTECH PWR HLD (STP): Free Stock Analysis
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