Earnings Preview: JA Solar Holdings - Analyst Blog

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JA Solar Holdings Co. Ltd. ( JASO ) is expected to release its third-quarter 2012 results on November 28, 2012. The Zacks Consensus Estimate for the third quarter of 2012 is a loss of 20 cents per share, narrower than the previous year figure of a loss of 36 cents per share on revenues of $253 million (significant year-over-year decline of 34.8%).

Second-quarter 2012, a Synopsis

JA Solar Holdings Company Ltd. posted second-quarter 2012 adjusted loss per American Depositary Share ("ADS") of 67 cents, wider than the Zacks Consensus Estimate of a loss of 14 cents. Results also came far below the year-ago adjusted earnings per ADS of $1.22.

JA Solar's revenues in the reported quarter were $284.4 million, missing the Zacks Consensus Estimate of $292 billion. Though revenues increased 12.8% from $252.2 million in the first quarter of 2012, it decreased 32.3% from $420.1 million in the second quarter of 2011.

Total shipments in the second quarter of 2012 were 418 MW, almost in line with the low end of the company's previous guidance range of 420 MW to 440 MW. This represents a 14.2% increase from 366 MW in the first quarter of 2012 and a 4.2% rise from 401 MW in the second quarter of 2011.

Guidance

JA Solar expects its cell and module shipments to be in the range of 350 MW and 370 MW in the third quarter of 2012. For full-year 2012, the company expects its total cell and module shipment forecast in the range of range of 1.5 GW and 1.8 GW versus its earlier range of 1.8 GW and 2.0 GW.

Read our full coverage on this earnings report: JA Solar Misses, Cuts Guidance

Zacks Consensus

The analysts covered by Zacks expects JA Solar to post third-quarter 2012 loss of 20 cents per share, narrower than the loss of 36 cents in the prior-year quarter. Currently, the Zacks Consensus Estimate ranges between a loss of 28 cents and 9 cents a share.

For 2012, the Zacks Consensus Estimate stood at a loss of 87 cents per share, wider than its prior-year loss of 29 cents per share. The current Zacks Estimate ranges between a loss of $1.09 and 30 cents per share.

Estimate Revisions Trend

Agreement

We do not see any movement over the last 7 days and 30 days for the third quarter as well as the full-year 2012.

Magnitude

The Zacks Consensus Estimate for the third quarter of 2012 remained static over the last 30 days with a loss of 20 cents per share for the third quarter of 2012. For full-year 2012, the Zacks Consensus Estimate remained static at a loss of 87 cents per share over the last 30 days.

Surprise History

With respect to earnings surprises, JA Solar has missed the Zacks Consensus Estimate over the last four quarters in the range of negative 1700.0% to negative 20%. Therefore, the average surprise over the last four quarters remained at negative 479.41%. The earnings miss in December 2011 was the lowest at 20%.

Our Recommendation

JA Solar is one of the most cost-efficient solar producers with a geographically-diversified customer base. However, like its peers, ReneSola Ltd. ( SOL ) and JinkoSolar Holding Co. Ltd. ( JKS ), JA Solar's performance may be adversely impacted by tepid module demand in Europe (especially Germany), changes in the Italian solar policy, rising competition, wafer dependency and the undersupply 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 the stock.

Based in Ningjin of the Hebei province in the People's Republic of China, JA Solar Holdings manufactures high-performance solar cells. JA Solar conducts its operations through its subsidiaries, JingAo Solar Company Ltd. (JA Hebei), Shanghai JA Solar PV Technology Company Ltd. (JA Zhabei) and JA Solar Technology Yangzhou Company, Ltd. (JA Yangzhou). JA Solar's solar cell manufacturing facilities are located in Ningjin, Hebei Province and Yangzhou, Jiangsu Province. Its solar module manufacturing facilities are located in Fengxian, Shanghai and silicon wafer manufacturing facilities are located in Lianyungang, Jiangsu Province.



JA SOLAR HOLDGS (JASO): Free Stock Analysis Report

JINKOSOLAR HLDG (JKS): Free Stock Analysis Report

RENESOLA LT-ADR (SOL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: JASO , JKS , SOL

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