LDK’s Magic 8-Ball: Outlook Not So Good
The tough environment in the solar market caused Chinese solar company LDK Solar Co Ltd (NYSE:LDK) to report a loss in its fourth quarter that was far worse than analysts’ expectations and warned of slumping sales in the first quarter.
The firm incurred a loss of $588.7 million ($4.63 per ADS) compared to the profit of $145.2 million ($1.09 per ADS) in the period a year ago. Revenues were down 54 percent to $420.2 million and its gross margin turned from a positive 27.3 percent a year ago to a negative 65.5 percent. This was the company’s third straight loss-making quarter, and included a charge for $179.2 million for customer receivables doubtful of recovery. Analysts had expected a loss of only 85 cents per share on sales of $431.6 million.
“In 2012, we expect that excess capacity and further policy uncertainties in Europe and the U.S. will result in continued intense competition within the solar industry,” Xiaofeng Peng, Chairman and CEO of LDK Solar, said in a statement.
Given the dismal outlook, LDK solar has indicated that revenues for the first quarter could be in the range $190 million to $230 million against the market expectations of $397.2 million.