Chinese solar equipment manufacturer LDK Solar (NYSE:LDK) announced that it will release its Q4 2011 results on April 12. [1] The company has revised its sales estimates for the period, lowering its sales revenue guidance and its wafer and module shipment estimates. It is expected to report negative margins because of inventory write-downs and other impairment charges. LDK Solar is one of the largest manufacturers of solar equipment in China and produces and markets polysilicon, solar cells, wafers and modules. Many of its competitors such as First Solar (NASDAQ:FSLR) and Suntech Power (NYSE:STP) have also booked losses for the last quarter mainly because of one-time charges.
We have a $4.46 price estimate for LDK Solar, which is 5% lower than its current market price.
Click here for our full analysis of LDK Solar.
Lower estimates
LDK Solar lowered its Q4 sales estimates from $440-520 million to $440-450 million. [1] It reduced its wafer shipments guidance to 215-220 Mega Watt (MW) from its earlier estimate of 180-270 MW. Module shipment guidance was narrowed to 250-260 MW from 180-270 MW, while in-house cell production guidance dropped to 130-150 MW from 220-250 MW.
Polysilicon production is expected to be between 2,100 and 2,300 Metric Tonnes (MT), revised from 2,200-2,800 MT. Chinese polysilicon companies are facing a tough environment over the past several months as prices have plunged below production costs for many small players. Sales estimates have lagged for most companies in solar panel manufacturing. Revenue and other figures have also been revised downward for the whole of 2011.
Losses expected
Due to declining module prices, LDK is expected to take in inventory write-downs and other impairment charges. [1] The company is also expected to bear losses on contractual purchase obligations. Overall, the write-downs are expected to pull down the company’s gross margins, and it may incur an operating loss for the period.
Understand how a company’s products impact its stock price on Trefis
Related articles
- Rising Polysilicon Prices Lift LDK’s Outlook as China Curbs Production (trefis.com)
- LDK Solar Earnings Preview: Polysilicon Pricing in Spotlight (trefis.com)
