North Coast Solar Stocks

August 12, 2009

LDK Solar posts big loss on writedown, shares dive

Filed under: LDK — Tags: , , , , , — Jason @ 5:17 pm

Wed Aug 12, 2009 5:17pm EDT

* Q2 shr loss $2.03 vs $0.92/shr loss estimate

* Took $175.8 mln inventory write-down

* Q3 revenue view below expectations

* Shares down 10.3 pct in extended trade

LOS ANGELES, Aug 12 (Reuters) – LDK Solar Co Ltd (LDK) reported a wider-than-expected quarterly net loss on Wednesday after taking a large inventory writedown, and forecast third-quarter revenue below Wall Street estimates, sending its shares down 8.7 percent in extended trade.

The company, which makes silicon wafers for the solar power industry, posted a second-quarter net loss of $216.9 million, or $2.03 per share. Wall Street analysts, on average, had been expecting a loss of 92 cents per share, according to Reuters Estimates.

The loss was bigger than LDK forecast on July 23 when it said it expected to report a net loss of $180 million to $200 million for the quarter.

LDK last August reported a second-quarter net profit of $149.5 million, or $1.29 per share.

“The numbers were miserable,” Soleil analyst Paul Leming said. “This company continues to burn cash and book value has been cut in half over the last three quarters… There is not much to like here.”

Like many in the solar industry, LDK is grappling with fallout from a dearth of financing for renewable energy projects and a global oversupply of solar panels that has sent prices on solar power products tumbling.

LDK’s results included a $175.8 million inventory write-down and $16.7 million loss on purchase commitments of polysilicon materials. Last month, the company had said it expected a writedown of $150 million to $160 million.

Net sales fell 48 percent to $228.3 million from $441.7 million a year ago. Analysts had been expecting revenue of $224.6 million, according to Reuters Estimates.

Sales were at the low end of LDK’s forecast of $225 million to $235 million.

The company shipped 231.7 megawatts (MW) of wafers, also at the low end of its 230 MW to 240 MW forecast.

For the third quarter, the Xinyu City, China-based company forecast revenue of $240 million to $270 million, below analysts’ average estimate of $277.4 million, according to Reuters Estimates.

Wafer shipments are expected to be between 260 MW and 300 MW for the current quarter, LDK said.

LDK’s shares sank 10.3 percent to $10.06 in after-hours trade, from a regular close of $11.21 on the New York Stock Exchange.

(Reporting by Nichola Groom; Editing by Bernard Orr and Robert MacMillan)

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