JA Solar (JASO) Misses Badly With Record Loss, Guides Lower

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05:39:09 pm on August 18, 2011

An awful earnings report out of JA Solar (JASO) this evening with the company missing analyst EPS estimates by a wide margin and reporting a record quarterly loss of .22/share.  Ouch.  Revenues came in at $413 million vs the estimate for $418 million.  The cause? You guessed it.. a slow down in Germany and policy changes in Italy not to mention increasing economic uncertainty. 

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Dr. Peng Fang, CEO of JA Solar, commented, "Our second quarter results reflect the market disruption that resulted from generally lower than anticipated installation levels in Germany and recent policy changes in Italy. Despite that challenging environment in the European market, demand for our high-efficiency, low-cost products remained healthy and ensured that we met our shipment goals. However, our gross margin and bottom line have been impacted by worse than anticipated market conditions and inventory provisions."

Despite the doom and gloom, the CEO remained upbeat and indicated he has seen improvement in recent weeks and expects shipment volumes to increase in the second half of the year.  The company is encouraged by the reductions in raw materials costs and maintains a strong balance sheet.

However, looking ahead to next quarter it doesn’t get any better with the company lowering shipments guidance to 450 – 470MW and for the full year lowering guidance to 1.8GW from 2.2GW.

Technically, JASO is in the same boat as every other solar stock right now.  While  these stocks are increasingly susceptible to short term oversold spikes, the firm downtrends remain in place and shares should continue to be avoided at this time. 

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