JA Solar Holdings Co. Ltd.
) announced a loss of 85 cents per American Depositary Share
(ADS) in its first quarter of 2013, better than the Zacks
Consensus Estimate of a loss of $1.01. However, results came far
below the year-ago earnings per ADS of $1.03.
The largest solar-cell producer by capacity, JA Solar managed to
narrow the loss on a sequential basis backed by record
first-quarter shipments that exceeded the company's forecast.
Strong demand in the high average selling price market of Japan
led to the growth. Japan accounted for a record 38% of its module
shipments in the quarter. During the quarter, the company also
increased its foothold in the high-margin markets of
Asia-Pacific, the Middle East and Africa.
JA Solar's revenues in the reported quarter were $270.0 million,
comfortably ahead of the Zacks Consensus Estimate of $230.0
million. Also, revenues increased 4.7% from $258.0 million in the
first quarter of 2012, and rose marginally from $268.9 million in
the fourth quarter of 2012.
Gross profit was $16.1 million, compared with a gross profit of
$5.4 million in the year-earlier period and a gross loss of $12.4
million in the fourth quarter of 2012.
Total operating expenses declined 3.9% year over year and 55.6%
sequentially to $29.8 million.
Total shipments in the reported quarter were 442.7 megawatt (MW),
exceeding the high end of the company's forecast of 410 MW to 430
MW. Shipments climbed 20.9% from 366 MW shipped in the year-ago
period, but decreased 11.5% from 500 MW in the fourth quarter of
The Chinese solar-products maker saw declining revenue for six
consecutive quarters due to weak demand and a global supply glut
of wafer and module, which resulted in cascading average selling
prices. However, the company successfully handled it with
shipments rising almost 21% year over year in the first quarter.
JA Solar at the end of the reported quarter had a cash balance of
$254.9 million with $44.8 million of total working capital. Total
long-term bank borrowings were $623.2 million, of which $451.4
million were due in one year. The total face value of outstanding
convertible notes due 2013 was $116.6 million as of Mar 31, 2013.
JA Solar expects second-quarter 2013 deliveries between 410 MW
and 430 MW. For 2013, the company reaffirmed its total cell and
module shipments of 1.7 gigawatt (GW) to 1.9 GW.
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.
The first-quarter 2013 earnings beat led to a 70.4% jump in JA
Solar's ADSs on May 20, 2013 on the Nasdaq. Other Chinese solar
stocks also gained ground with
Trina Solar Limited
) jumping 20.4%,
First Solar Inc.
) climbing 9.8%,
Suntech Power Holdings Co. Ltd.
) increasing 27.3% and
Yingli Green Energy Holding Co. Ltd.
(YGE) seeing a boost of 13.1%.
JA Solar currently retains a Zacks Rank #2 (Buy).
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