LDK's Lowers 1Q Outlook, Casts Pall Over Solar (LDK)

LDK Solar LDK lowered its first-quarter revenue outlook for 2011 to $745-$755 million from its prior guidance of $800 to $850 million after the market closed on Tuesday. LDK, a vertically integrated manufacturer of photovoltaic products and solar wafers, did not give a reason for its lower outlook. On Monday, Xingxue Tong, president and COO, was quoted in DigiTimes saying that “demand has been stalled due to ambiguous incentive policies of Germany and Italy.” In the interview, Tong predicted a rebound in the solar market in two to three weeks, saying that the market was now in an upturn after the first quarter, which has usually been slow over the years because of weather conditions. LDK did reiterate its 2011 guidance of revenue in the range of $3.5 to $3.7 billion with gross margins between 24% and 29%. It kept its guidance for wafer shipments between 2.7 and 2.9 gigawatts, module shipments to be between 800 and 900 megawatts, polysilicon production to be between 10,000 and 11,000 megatons, and in-house cell production to be between 500 and 600 MW. Tong also predicted that the spot price for polysilicon will revive soon and should not be considered overpriced at $100 per kilo. LDK did raise its in-house polysilicon production outlook for the first quarter to a range of 2,450 to 2,470 MT from the prior guidance of between 2,300 and 2,400 MT. LDK also changed its guidance on wafer shipments to 625 to 635 MW compared to an earlier guidance of 610 to 660 MW, with module shipments falling to a range of 109 to 114 MW from a range of 120 to 140 megatons. In-house cell production guidance remained nearly the same and the gross margin was revised up to between 30% and 31% from 27% and 29%. Shares of LDK are currently down 5.9% in pre-market trading to $10.75 from a closing price yesterday of $11.42.
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