LDK Solar (LDK) Warned Of Poor Quarter & It’s Delivering, Shares Plunge AH

LDK Solar (LDK) is reporting terrible earnings results after the bell today, but it shouldn’t come as too much of a surprise because the company warned of a large write down a few weeks ago.  They reported a large EPS loss of -2.03/share (which includes the $175 million write down) vs the analyst expectations of a .91/share loss.  No signs of recovery on the revenue side either with a 50% drop over the year ago quarter and a 25% drop over last quarter (they reported $228 million which is also in the range they predicted.  What is most likely hurting the stock after hours (down more than 10%) is future guidance which has come in lower than expectations. The company is now lowering guidance and sees revenues in the range of $240 – 270 million vs the consensus estimate of $290 million.

“Our results for the second quarter of 2009 reflect the prevailing operational challenges for the solar industry. The continued decline in prices for solar wafers impacted our top and bottom lines and required an additional inventory write-down for the company, which significantly impacted our margins in the second quarter,” stated Xiaofeng Peng, Chairman and CEO of LDK Solar. “As part of our ongoing efforts to realign our near-term strategy and operations with current industry dynamics, we remained focused on improving our cost structure, increasing wafer sales and ramping up polysilicon production.

The CEO also went on to to say he’s encouraged by recent developments in the solar industry and that demand has begun to increase.  China’s Golden Sun subsidy program is the foundation for solar success in local China markets and he believes the company is well positioned and currently negotiating contracts.


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