LDK Solar Co. Inc. (NYSE:LDK) – First Quarter 2011 Earnings Preview
Thursday, May 26, 2011 1:05 PM

LDK Solar Company Inc. (LDK) is scheduled to release its first quarter earnings for the fiscal year 2011 on June 7 after the market closes. The company manufactures photovoltaic cells used in solar panels with its manufacturing facilities located in China. The company recently completed an acquisition of 70 percent of Solar Power Inc. for $33 million and has been aggressive in its transformation from a core wafer manufacturer to a vertically integrated solar company.

In Q4 2010:

  • Record quarterly revenue of $920.9 million, an increase of 202.3 percent compared with the $$304.6 million it posted in the corresponding quarter of 2009. Revenue was up 36.6 percent sequentially.
  • Shipped 627.9 MW of wafers compared with 340.4 megawats (MW) in the fourth quarter of 2009.
  • Net income was $145.2 million as against a net loss of $7.3 million in the same quarter of 2009.
  • Reported earnings per share of $1.09 per diluted ADS compared with a loss of $0.07 per share in Q4 2009.

For fiscal year 2010, LDK Solar reported revenue of $2.5 billion, an increase of 127 percent compared with revenue of $1.1 billion it posted in FY 2009. The company earned net income of $296 million as against a net loss of $233 million in FY 2009. EPS for the year 2010 was $2.18 per diluted share.

Analysts following the company expect it to earn between $0.65 and $0.85 per share this quarter. Revenue were projected to come in between $748 million and $854 million based on prior guidance. However, the company has now lowered guidance and expects revenue to be between $745 million and $755 million this quarter. The company also expects wafer shipments of 625 to 635 megawatts (MW), module shipments of 109 MW to 114 MW, in-house polysilicon production of 2,450 MT to 2,470 MT, in-house cell production between 44 MW and 46 MW. The lowered revenue forecasts are a result of rising inventories that are lowering prices on solar panels. The company also had to postpone a proposed debt offering that was intended to lower short-term debt and allay concerns about its liquidity position. The company cited ‘recent market conditions' as the main reason for this delay.

LDK Solar ADRs closed at a price of $6.18 on May 25 and has been trading in the range of $4.97 to $15.10 in the last 52 weeks. Collins Stewart reduced the average target price on LDK from $11.00 to $8.00 and has downgraded the stock from a Sell to Hold.



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