Friday, February 11, 2011

JA Solar Holdings Co. Ltd. (NASDAQ: JASO): Q4 Earnings Preview 2010

JA Solar Holdings Co. Ltd. (NASDAQ: JASO) is scheduled to release its fourth-quarter before the opening bell on Tuesday, February 22, 2011. Analysts, on average, expect the company to report earnings of 48 cents a share on revenue of $569.21 million. In the year ago period, the company reported earnings of 14 cents per share on revenue of $238.43 million.

JA Solar Holdings Co., Ltd., through its subsidiaries, engages in the design, manufacture, and marketing of high-performance solar cells. It offers monocrystalline and multicrystalline solar cells. The company sells its products to solar module manufacturers who assemble and integrate solar cells into modules and systems that convert sunlight into electricity for power generation. The company has a strong presence across the world in key markets, including Germany, Italy, U.S., Spain, India, Korea, China and Japan.

In the preceding third quarter, the Shanghai, China-based company's net income was $77 million, or 47 cents per share, compared to $17.3 million, or 10 cents per share, in the year-earlier quarter. Revenue jumped to $541 million from $193 million. Analysts, on average, expected the company to report earnings of 34 cents per share on revenue of $453.75 million.

At its last earnings call in November, the company boosted its shipments outlook for the full year of 2010. The company said that it expects shipments to exceed 1.45GW in 2010, compared with prior guidance of 1.35GW. Shipments in the fourth quarter of 2010 are expected to be approximately 450MW.

The company has won a flurry of orders in recent months. Recently, the company signed a supply agreement with one of the leading European specialists in photovoltaic systems to provide 400 megawatts (MW) of solar modules from 2011 through the end of 2013. Last month, JA Solar signed a module supply contract with a leading Italian renewable energy company, which belongs to a large utility group in Europe.

Among other developments, the company entered into a long-term supplemental wafer and polysilicon supply agreement with GCL-Poly Energy Holdings Ltd. and its subsidiaries. As per the adjusted terms of this supplemental agreement, GCL-Poly will supply JA Solar with an aggregate of approximately 10GW of high quality polycrystalline wafers and polysilicon products for a five year period, from January 2011 to December 2015, at pre-determined shipment volume.

JA Solar is one of the most cost-efficient solar producers in the world, with a geographically diverse customer base as well as silicon wafer supply agreements in place to support its production. Positive factors include ongoing expansion programs, improving operating efficiencies, rising margins and higher conversion efficiency. The company expects robust demand for its products from both existing and new customers. The company is steadily expanding its customer base worldwide, with strong growth in several geographic end markets including, U.S., Canada, Italy, Japan, Australia, China and India. The company had already signed supply agreements with multiple customers for 2011 product delivery that exceeds 1.2 GW, and has received prepayments associated with these supply agreements, further improving its future order visibility.

Solar industry as a whole has benefited from continued strong demand thanks to growing awareness about global warming, skyrocketing oil prices, cheap financing and technological advances. Companies involved in the production of semiconductors used in solar panels have enjoyed a positive quarter. Many have experienced rising shipments over the last few quarters, resulting in a sequence of record quarters. The world is becoming increasingly environmentally conscious. Both commercial and private demand for solar power is rising. Solar options are becoming more attractive as more governments provide better options for buildings producing solar power to feed into and out of the grid as required.

US President Barack Obama in his State of the Union address last week called for 80 percent of the nation's electricity to come from clean sources by 2035. He hammered the theme again in his weekly radio address, taped at the headquarters of a company specializing in solar power and energy-efficient technologies.

Thanks to better cost advantages, Chinese solar module maker have grabbed more market share from their international competitors. Local solar companies have also benefited from China's well-developed supply chain, cheap electricity, supportive policies and even low environmental standards.

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire