JA Solar Holdings Co. Ltd. Earnings Cheat Sheet: Swinging to a Loss and Missing Estimates

JA Solar Holdings, Co., Ltd. (NASDAQ:JASO) swung to a loss in the third quarter, missing analysts’ forecast. JA Solar Holdings designs, manufactures and markets high-performance solar cells, which are made from specially processed silicon wafers.

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

JA Solar Holdings, Co Earnings Cheat Sheet for the Third Quarter

Results: Reported a loss of $59 million (36 cents per diluted share) in the quarter. The semiconductor company had net income of $80.8 million or 49 cents per share in the year earlier quarter.

Revenue: Fell 31.6% to $388 million from the year earlier quarter.

Actual vs. Wall St. Expectations: JASO fell short of the mean analyst estimate of a loss of 2 cents per share. It beat the average revenue estimate of $379.2 million.

Quoting Management: Dr. Peng Fang, CEO of JA Solar, commented, “This continues to be a challenging period for the solar industry, but we are heartened that JA Solar has been able to retain customers and maintain strong market share in the third quarter. While ongoing macro-economic and industry volatility continued to restrain demand, overall product shipments were at the low end of our guidance at 445MW. With the European debt crisis limiting the amount of financing available for solar power projects, we did not see the anticipated demand recovery in major European markets during the month of September. However, JA Solar performed relatively well as customers increasingly relied on top tier suppliers with strong liquidity. In the current market environment, where customers have more choices of products and suppliers, we have seen customers shifting more of their orders to suppliers who can deliver high power products together with a strong brand, a reputation for quality, and a healthy balance sheet. JA Solar’s suite of industry-leading high-performance products gives us a clear advantage and this is particularly evident in our module shipments for the third quarter, which grew by more than 45% sequentially. Our gross margin for the quarter has been impacted by an inventory provision of US$21.7 million. Excluding this inventory provision, gross margin would have been positive.”

Key Stats:

The company has now fallen short of estimates in the last two quarters. In the second quarter, it missed expectations by 19 cents with a loss of 22 cents versus a mean estimate of a loss of 3 cents per share.

Looking Forward: Over the past sixty days, the outlook for the company’s performance next quarter has become increasingly unfavorable. The average estimate for the fourth quarter is 2 cents per share, a drop from 11 cents. For the fiscal year, the average estimate has moved down from 39 cents a share to 20 cents over the last sixty days.

Competitors to Watch: Trina Solar Limited (NYSE:TSL), Suntech Power Hldgs. Co., Ltd. (NYSE:STP), LDK Solar Co., Ltd (NYSE:LDK), ReneSola Ltd. (NYSE:SOL), JinkoSolar Holding Co., Ltd. (NYSE:JKS), SunPower Corporation (NASDAQ:SPWRA), Yingli Green Energy Hold. Co. Ltd. (NYSE:YGE), China Sunergy Co., Ltd. (NASDAQ:CSUN), and First Solar, Inc. (NASDAQ:FSLR).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)