Yingli Green Energy (YGE) Breaks Down After Lowering Near Term Guidance, Full Year Guidance Intact

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05:58:57 pm on May 11, 2011

Yingli Green Energy (YGE) updated its guidance today for Q1, Q2 and the full year.  The company is lowering its shipment  and gross margins guidance.  They now see Q1 shipments coming in lower than the year ago quarter vs the previous guidance of shipments coming in a bit higher than the year ago quarter.  Margins are expected to come in around 27% vs the previous guidance of around 30%.

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Like its competitors, YGE is blaming the uncertainty over policy changes in Italy.  Italy first announced it was planning subsidy cuts in March and didn’t finalize the plan until a couple weeks ago.  That led to delays in projects until the policy became more certain.  Perhaps now that the uncertainty has lifted those projects will get underway.  They do see shipments increasing 30% in Q2 over Q1.  They’re also blaming the severe weather in Germany.

For the full year YGE is reaffirming its shipment guidance of 1.70 – 1.75GW which would be an increase of nearly 65% over 2010.

The company will announce official earnings results before the market opens on May 20th.

Shares of YGE dropped nearly 5% on the news today with heavier than average volume.  The move was important because it represented a firm breakdown at resistance of the 200 day moving average.  Shares of YGE should be avoided at this time.

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