JA Solar Holdings Co. Ltd.
) announced a profit of 32 cents per American Depositary Share
(ADS) in the first quarter of 2014, comfortably surpassing the
Zacks Consensus Estimate of a profit of 8 cents by 300%. The
company also swung to a profit in the reported quarter from a loss
of 85 cents per share in the year-ago period. The reported figure
was also 113.3% higher than 15 cents per ADS reported in the
The better-than-expected result was attributable to higher
shipments and the increase in revenue. The solid quarterly
performance reflects the resilience of the company's business model
and its ability to quickly adapt to market demand. JA Solar has an
attractive product and geographic mix.
JA Solar's revenues in the reported quarter were $366.0 million,
comfortably beating the Zacks Consensus Estimate of $336.0 million
by 8.9%. Revenues also increased 35.7% from $269.8 million in the
first quarter of 2013 and 5.2% from $348.0 million in the fourth
quarter of 2013.
Total shipments in the first quarter 2014 were 638.1 megawatt (MW),
comfortably exceeding the high end of the company's forecast of 610
MW. Shipments climbed 44.1% from 442.7 MW shipped in the year-ago
period. However, the reported figure was down 4.1% from 665.5 MW in
the fourth quarter of 2013.
The year-over-year improvement in shipments was attributable to
54.3% and 30.8% increase in module and cell shipment, respectively.
In fact, modules and cells comprised 61% and 39% of total shipments
in the reported quarter.
Increasing shipments came on the back of a strong Asia-Pacific
market where sales increased 66.0% year over year. Shipments to
Japan increased sequentially and represented 32% of the total,
while demand in Europe remained healthy as the market became
competitive for high-power products. However, shipments to China
were impacted by seasonality during the quarter under review.
Gross profit was $61.2 million or 16.7% of total revenues, compared
with $16.1 million or 6.0% of total revenues in the year-earlier
period and $53.9 million or 15.5% of total revenues in the fourth
quarter of 2013.
Total operating expenses increased 18.5% year over year but
declined 20.5% sequentially to $35.3 million.
At the end of the reported quarter, JA Solar had a cash balance of
$313.4 million with $225.6 million of total working capital. Total
long-term bank borrowings were $366.7 million, of which $118.5
million were due in one year.
Management has provided an optimistic guidance for 2014 based on a
flourishing solar industry. The company expects lucrative
opportunities from the emerging markets of Latin America and the
Middle East. Expansion of its downstream project pipelines will
also give its business a boost. Apart from other markets, it also
expects favorable demand from its home market of China. In the
second half of 2014, JA Solar expects to start the construction of
Standard Operating Environment - owned utility projects in China.
JA Solar expects to ship 670-700 MW of cells and modules in total
for the second quarter. For 2014, the company reaffirmed its full
year cell and module shipment guidance of between 2.7 GW and 2.9
GW, including 200 MW of module shipments to the company's
Enphase Energy, Inc.
) reported a loss of 15 cents per share in the first quarter of
2014, narrower than the Zacks Consensus Estimate of a loss of 19
cents per share.
Other Upcoming Releases
Trina Solar Limited
) is scheduled to release its first quarter earnings on June 4. The
Zacks Consensus Estimate is currently at a loss of 1 cent.
) is scheduled to release its first quarter earnings on May 15. The
Zacks Consensus Estimate is currently at a loss of 5 cents.
Shanghai, China-based JA Solar Holdings Co. currently sports a
Zacks Rank #1 (Strong Buy).
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