JA Solar Holdings Co. Ltd. JASO posted third-quarter 2015 adjusted earnings of 68 cents per diluted American Depositary Share (ADS), surpassing the Zacks Consensus Estimate of 29 cents by an impressive 134.5% and the year-ago figure by 240%.
 

Total Revenue

JA Solar’s revenues in the reported quarter were $601 million, beating the Zacks Consensus Estimate of $515 million by 16.7% and the year-ago figure by 26.4%. The improvement in revenues was driven by strong shipments to key markets, primarily China.

Shipments

Total shipments in the third quarter 2015 were 1,126.8 megawatts (“MW”), up 43.5% year over year. Shipments during the quarter exceeded the company's guidance range of 900–950 MW.

The year-over-year improvement was attributable to a 54.8% surge in module shipment. However, cell shipment plunged almost 42.3% year over year. Modules and cells comprised 95.3% and 4.7% of total shipments in the reported quarter as against 88.3% and 11.7%, 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 Chinese market, which constituted 53.1% of the total quarterly shipment. The Americas, however, witnessed a considerable drop, having contributed a mere 1% to total shipments, compared with 4.7% in the year-ago quarter.

Highlights of the Release

Gross profit was $106.6 million, up 49.2% year over year. Gross margin expanded 270 basis points year over year to 17.7%. The improvement in gross margin was primarily due to lower polysilicon prices and a stable ASP in key markets, including China, as well as continued cost reduction.

Total operating expenses of $59.5 million were 9.9% of revenues, up 43% from the year-ago period.

Interest expenses were $9.2 million, up 3.4% year over year.

At the end of third-quarter, the company repurchased a total of nearly 3.0 million ADSs.

Financial Condition

At the end of the third quarter, JA Solar had cash balance of $289.4 million compared with $347.3 million at 2014-end. Total long-term borrowings were $369.3 million during the quarter.

Guidance

JA Solar expects to ship 1.1–1.2 gigawatts (“GW”) of cells and modules in the fourth quarter of 2015. The company anticipates module shipment to be below 100 MW to its downstream projects due to strong customer demand.

Other Peer Releases

First Solar Inc. FSLR reported adjusted third-quarter 2015 earnings of $3.38 per share, which swept past the Zacks Consensus Estimate of $1.55 by 118.1%.

SunPower Corp. SPWR reported third-quarter 2015 adjusted earnings per share of 3 cents (adjusted for 44 cents of non-recurring items), lagging the Zacks Consensus Estimate of 14 cents by 78.6%. Reported earnings also plunged 88% from the year-ago figure of 25 cents.

Canadian Solar Inc. CSIQ reported third-quarter earnings of 79 cents per share, comfortably beating the Zacks Consensus Estimate of 27 cents by 192.6%.

Zacks Rank

JA Solar presently holds a Zacks Rank #3 (Hold).

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