UPDATE: JA Solar Shares Drop After Q2 Results

Shares of JA Solar

dropped more than 5% in pre-market trading after the company reported downbeat second-quarter profit. The Shanghai-based company posted quarterly net income of 40.1 million renminbi, or $6.5 million, versus a year-ago loss of $21.3 million. Its earnings per ADS came in at $0.10, while adjusted earnings per ADS came in at $0.14. Its revenue surged 52.9% to $390.5 million (RMB 2.4 billion). However, analysts were expecting earnings of $0.21 per ADS on revenue of $380 million. JA Solar's total shipments surged 47% y/y to 681.8 MW. It posted an operating profit of RMB 89.7 million ($14.5 million), versus a year-ago operating loss of RMB 33.3 million ($5.4 million). JA Solar's gross margin rose 710 basis points y/y to 15.2%. As of June 30, 2014, JA Solar had cash and cash equivalents of RMB 2.0 billion ($326.9 million). For the full year, JA Solar now projects shipments of 2.9 gigawatts to 3.1 gigawatts, versus its earlier forecast of 2.7 GW to 2.9 GW. Mr. Baofang Jin, chairman and CEO of JA Solar, said, "Our second quarter results were satisfactory, with strong revenue growth, continued bottom-line profitability, and progress in our transition from cells to modules as our main revenue stream. This successful transition has enabled us to emerge as a tier 1 module supplier in the world. Furthermore, we are actively growing our downstream business. In the second half of 2014, we expect to sustain both our growth and profitability, due to accelerating activity in China, and continued favorable product and geographic mix." JA Solar shares declined 5.41% to $9.45 in pre-market trading.