Solar PV makers continue to hammer themselves and their peers with a seemingly never-ending torrent of terrible news. After markets closed yesterday LDK Solar Co., Ltd. (NYSE: LDK) revised guidance straight downward for its second quarter ended June 30th and for the full fiscal year. LDK picks up the ball from JA Solar Holdings Co., Ltd. (NASDAQ: JASO), which took the solar PV sector down yesterday on a weaker-than-expected earnings report even after JA Solar had warned that the quarter would be awful. LDK doesn’t officially report earnings until August 29th, so there’s still plenty of time for the situation to get even worse.

The list of solar companies that have disappointed on earnings is nearly endless, but some of the bigger names are First Solar Inc. (NASDAQ: FSLR), SunPower Corp. (NASDAQ: SPWRA), Trina Solar Ltd. (NYSE: TSL), ReneSola Ltd. (NYSE: SOL), Canadian Solar Inc. (NASDAQ: CSIQ), and Suntech Power Holdings Co. Ltd. (NYSE: STP). Evergreen Solar Inc. (NASDAQ: ESLR) even chose last week to file for bankruptcy.

LDK’s revisions were substantial. Revenue guidance for the second quarter from $710-$780 million to $480-$500 million. Analysts had a consensus estimate of $714 million. For the year, forecast revenue was revised downward from $3.5-$3.7 billion to $2.5-$2.7 billion. The company will also write down up to $60 million in inventory.

And it gets worse. Gross margins are expected at a meager 1.5%-2.5% on shipments of just 75-80 megawatts of panels in the quarter. How bad is that? The forecast in April called for panel ships in the second quarter of 200-220 megawatts. Full-year shipments are now forecast to fall from 750-800 megawatts to 600-700 megawatts.

So, shipments are tanking and margins are disappearing. It’s no wonder that LDK’s shares are trading off -22% in the pre-market this morning, at $5.10, within reach of a 52-week low of $4.65. The 52-week high of $15.10 may be disappearing over the horizon.

LDK has more problems than just weak shipments and falling margins. A board member who was the head of the company’s audit committee resigned last month, calling into question some of LDK’s accounting practices. Trina Solar faces some of the same charges related to dicey accounting. Combined with issues related to reverse mergers that appear to be crooked, Chinese solar makers have taken a real pounding in the past two months.

About the only thing that would restore some confidence in the industry is a good quarter, and that does not appear to be in the picture for at least the second half of this year.The Guggenheim Solar ETF (NYSE: TAN) fell within a hair of its 52-week low yesterday, closing at $5.22 in a 52-week range of $5.08-$9.34.

Paul Ausick

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