JA Solar Holdings Co. Ltd. JASO posted first-quarter 2015 adjusted earnings of 15 cents per diluted American Depositary Share (ADS) in the quarter, missing the Zacks Consensus Estimate of 20 cents by 25%. In the year-ago period, the company had reported earnings of 32 cents per ADS.
Investors reacted negatively to lower-than-expected earnings with shares losing 7% from May 15, 2015 to close at $9.37 on May 19.
Total Revenue
JA Solar’s revenues in the reported quarter were $387.7 million, missing the Zacks Consensus Estimate of $399 million by 2.8%. Revenues jumped 5.6% year over year mainly driven by increased demands in the European and Japanese markets.
Shipments
Total shipments in the first quarter 2015 were 681.5 Megawatts (“MW”), up 6.8% year over year but down 28.5% sequentially.
The year-over-year improvement was attributable to a 50.5% surge in module shipment. However, cell shipment plunged almost 61.1% year over year. Modules and cells comprised 85.7% and 14.3% of total shipments in the reported quarter as against 60.8% and 39.2%, respectively, in the year-ago period. This reflects the company’s strategic shift in focus to solar modules from cells.
The increase in shipments came on the back of strong demand from the European and Asia-Pacific (excluding China) markets (especially Japan), which constituted 22.6% and 53.9% of the total quarterly shipment. Shipments to China comprised 21.4%. Americas witnessed a considerable drop, contributing a mere 1% to total shipments.
Highlights of the Release
Gross profit was $62.4 million representing 16.1% of total revenue in the first quarter compared to 16.7% in the year-ago quarter.
Total operating expenses of $38.2 million, were 9.9% of revenue compared to 9.7% in the year ago period.
Interest expenses were $10.7 million, down 16.3% from the year ago period.
Financial Condition
At the end of the first quarter, JA Solar had cash balance of $306.2 million compared with $347.3 million at 2014-end.Total long-term borrowings were $365.8 million, of which $5.7 million are due within the next one year.
Guidance
JA Solar expects to ship 680–720 MW of cells and modules in the second quarter of 2015. Full-year 2015 shipments are expected in the range of 3.6–4 Gigawatts (“GW”). JA Solar expects to ship 200 MW of modules to its downstream projects.
Other Peer Releases
First Solar Inc. FSLR reported adjusted first-quarter 2015 loss of 62 cents a share, much wider than the Zacks Consensus Estimate of a loss of 29 cents.
SunPower Corp. SPWR reported first-quarter 2015 adjusted earnings per share of 5 cents, missing the Zacks Consensus Estimate of 9 cents.
Canadian Solar Inc. CSIQ reported first-quarter earnings of $1.04 per share, comfortably beating the Zacks Consensus Estimate of 75 cents by 38.7%.
Zacks Rank
JA Solar Holdings presently holds a Zacks Rank #3 (Hold).
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