The largest solar-cell producer by capacity,
JA Solar Holdings Co. Ltd.
) announced a loss of 37 cents per American Depositary Share
(ADS) in the third quarter of 2013, narrower than the Zacks
Consensus Estimate of a loss of 42 cents. The company also cut
its loss on a sequential as well as year-over-year basis. Loss
per ADS was $1.56 in the year-ago period and 59 cents in the
CANADIAN SOLAR (CSIQ): Free Stock Analysis
ENPHASE ENERGY (ENPH): Free Stock Analysis
FIRST SOLAR INC (FSLR): Free Stock Analysis
JA SOLAR HOLDGS (JASO): Free Stock Analysis
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The loss narrowed due to higher-than-expected shipments backed by
an improving macro environment and increased installation
activity across key markets.
JA Solar's revenues in the reported quarter were $287.3 million,
comfortably ahead of the Zacks Consensus Estimate of $270.0
million. Revenues also increased 7.2% from $268.0 million in the
third quarter of 2012 and 11.0% from $258.9 million in the second
quarter of 2013.
Gross profit was $32.5 million or 11.3% of total revenue,
compared with $15.8 million or a negative 5.9% in the
year-earlier period and $21.0 million or 8.3% of total revenue in
the second quarter of 2013.
Total operating expenses declined 57.0% year over year and 41.9%
sequentially to $26.4 million.
Total shipments in the reported quarter were 500.2 megawatt (MW),
comfortably exceeding the high end of the company's forecast of
450 MW to 470 MW. Shipments climbed 19.7% from 417.8 MW shipped
in the year-ago period, and 7.9% from 463.7 MW in the second
quarter of 2013.
Increasing shipments came on the back of a strong U.S. market
where module shipments tripled sequentially. Japan also remains
one of the main revenue drivers for the company despite
JA Solar also remains proactive in the domestic market with the
Chinese government boosting its target to 35 gigawatt (GW) of
cumulative solar installations by 2015 and offering the subsidy.
Recently the Chinese government announced 50% refunds to the
value added tax (VAT) for sales taking place from Oct 2013
through Dec 2015.
At the end of the reported quarter, JA Solar had a cash balance
of $401.1 million with $113.7 million of total working capital.
Total long-term bank borrowings were $467.4 million, of which
$236.1 million were due in one year.
JA Solar expects to ship 500-550 MW of cells and modules in total
for the fourth quarter. For 2013, the company revised its total
cell and module shipments outlook upward to 1.9-1.95 GW from the
prior expectation of 1.7-1.9 GW.
Solar cell manufacturer
Canadian Solar Inc.
) reported earnings of 56 cents in the third quarter of 2013
versus a loss of $1.01 per share in the year-ago quarter.
Canadian Solar swung into profit in the reported quarter on the
back of higher shipments and revenues.
JA Solar is one of the most cost-efficient solar producers in the
world, with a geographically diverse customer base as well as
silicon wafer supply agreements in place to feed its production.
Positive factors include ongoing expansion programs, improving
operating efficiencies and higher conversion efficiency. JA Solar
is steadily expanding its customer base worldwide in several
geographic end markets including the U.S., Canada, Italy, Japan,
Australia, China and India.
Again, Chinese solar product manufacturers, like JASO, are also
speeding up their domestic operations with the government
becoming more and more stringent on environmental issues. The
electricity generators are implementing new measures to bring
down emission levels of greenhouse gases. At present, nearly 70%
of China's electricity is generated from coal-fired power plants.
The country is taking active steps to idle the high operating
cost coal mines. China aims to double its generating capacity by
2030, with half of all new plants having renewable sources of
However, tepid module demand in Europe, rising competition and
the financial stability of its customers may adversely impact
performance over the near term.
Shanghai, China-based JA Solar Holdings Co. currently has a Zacks
Rank #3 (Hold). Promising companies in the space,
Enphase Energy, Inc
First Solar Inc.
), look attractive with a Zacks Rank #2 (Buy).