Before the market opened this morning, LDK Solar (NYSE:LDK) reported third quarter earnings. The company earned $88.4 million (diluted EPS of $0.77) on revenues of $541.8 million. Analysts were expecting EPS of $0.71 on revenues $486.7 million. LDK’s revenues topped even the highest estimate.
LDK also reached an annualized wafer production high of 1.2 GW. Thecompany had set that milestone as a goal for the end of the fourthquarter. That achievement led the company to up its production guidanceto 1.4 GW of annualized wafer production capacity by the end of 2008.
LDK also raised guidance. The company expects revenues of $555-$565million in the fourth quarter and full-year revenues of $2.9-$3.1billion for the 2009 fiscal year on shipments of 1.8-1.85 GW of waferproduction. The company also expects to improve gross margins in 2009from the fourth quarter 2008 estimate of 18%-21% to 26%-31%. LDK’s newpolysilicon manufacturing plant is expected to produce 5,000-7,000metric tons of polysilicon next year.
During the quarter LDK completed a follow-on offering of 4.8 millionADSs, raising $192.4 million to fund its new polysilicon plant and toexpand its wafer production facilities. If LDK can manage to produceits planned quantities of polysilicon in 2009, that’s where the highergross margins will come from. Market prices for silicon are dropping,but LDK has an opportunity to make a big difference to its bottom linewith the new plant.
All the good news from LDK weighs against the bad news that came outMonday from MEMC Electronic Materials (NYSE:WFR). MEMC cut its fourthquarter revenue guidance from $540-$600 million to $475-$525 millionwith a reduction in gross margins from over 50% to around 48%. Thecompany also cut its operating expenses by $14 million due to theforfeiture of option grants by its former CEO.
Energy Conversion Devices (NASDAQ:ENER), another Chinese solar panelmaker, has seen its share price fall nearly 20% in just 5 trading days.A week ago,Energy Conversion’s share price was 30% higher than it was a year ago;this morning it’s barely 1% higher.
LDK’s share price has fallen by 80% from its 52-week highs. Today’sannouncement, especially the higher guidance, should give the shares aboost.
Paul Ausick
November 19, 2008
Is Your Money Earning the Best Possible Rate? (Sponsor)
Let’s face it: If your money is just sitting in a checking account, you’re losing value every single day. With most checking accounts offering little to no interest, the cash you worked so hard to save is gradually being eroded by inflation.
However, by moving that money into a high-yield savings account, you can put your cash to work, growing steadily with little to no effort on your part. In just a few clicks, you can set up a high-yield savings account and start earning interest immediately.
There are plenty of reputable banks and online platforms that offer competitive rates, and many of them come with zero fees and no minimum balance requirements. Click here to see if you’re earning the best possible rate on your money!
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
