Yingli & LDK, Solar Earnings in the Shade (LDK, YGE, TAN)

LDK Solar Co. Ltd. (NYSE:LDK) makes multicrystalline wafers used to manufacture PV solar cells and Yingli Green Energy Holding Company Limited (NYSE:YGE) is an integrated maker of PV solar products. Both companies have reported large net losses for the first quarter of 2009, and shares of both look lower ahead of the open.

LDK reported a net loss of -$0.21 per diluted ADS on revenue of $283.3 million. Analysts had been estimating a net loss of -$0.07 per diluted ADS on $240 million in revenues. Sequentially, LDK did a lot better, having lost -$2.05 per diluted ADS in the fourth quarter of 2008. The company also had to take an additional write-down on inventories when it filed its 2008 annual report.

Yingli posted a net loss of -$0.16 per diluted ADS on revenue of $146.3 million. Analysts were expecting a loss of -$0.01 per diluted ADS on revenues of $194.36 million.

Yingli cited the weak global economy, tight credit for PV solar project financing, lousy weather in Germany, and changes to Spain’s feed-in tariff as the culprits for the weak report. LDK referred only to a “continued challenging operating environment for economies and industries globally” as the reason for its slide.

The problems for solar providers look to be continuing through this quarter. The global economy is still weak and credit is still tight. Until something shakes the money tree, the solar makers face a dim outlook.

LDK is off more than 5% in the pre-market, at $8.80. The company’s 52-week trading range is $3.75-$52.40. Yingli is off just a penny, to $10.10 in the pre-market. Its 52-week range is $2.50-$23.15. The Claymore/MAC Global Solar Energy ETF (NYSE:TAN) is off about 0.42% in the pre-market, to $9.40. Its 52-week range is $4.65-$29.84.

Paul Ausick
May 22, 2009