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JA Solar (JASO) Beats on Q3 Earnings, China Shipments Down
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JA Solar Holdings Co., Ltd. posted third-quarter 2016 adjusted earnings of 13 cents per diluted American Depositary Share (ADS), beating the Zacks Consensus Estimate of 3 cents by a wide margin.
Earnings, however, deteriorated from the year-ago figure of 65 cents by 80%.
Total Revenue
JA Solar’s revenues in the reported quarter were $624.3 million, comfortably beating the consensus mark of $586 million by 6.5%. Moreover, the reported figure improved 9% from the year-ago level on strong shipments to key markets, which exceeded the low end of the company’s guidance.
Total shipments in the third quarter of 2016 were 1,240.9 megawatts (“MW”), nearly all of which were modules and cells shipped to external customers. So, external shipments were also 1,240.9 MW, up 10.1% year over year.
The year-over-year improvement in external shipments was attributable to an 11.8% upside in module shipment. However, a 22.8% decline was witnessed in cells and cell tolling.
The increase in shipments came on the back of strong demand from South America, which constituted 20.2% of the quarter’s total shipment. Shipments to North America rose to 13% of the total, from 1% in the year-ago quarter. Europe, however, witnessed a considerable drop, having contributed 6.5% to total shipments, compared with 7.8% a year ago. Asia-Pacific (excluding China) markets also witnessed a slowdown with shipments constituting 25.8% of the total, a considerable drop from 36.3% a year ago. China also saw a decline with shipments constituting 32% of the total in the reported quarter, from 53.1% in the year-ago quarter.
Highlights of the Release
Gross profits were $86.1 million, down 15.2% year over year. Gross margin, also, contracted 440 basis points year over year to 13.8%.
Total operating expenses of $67.9 million represented 10.9% of revenues, compared to the year-ago figure constituting 9.9% of revenues.Operating profit was $18.2 million, compared with $44.9 million in the year-ago quarter.
Interest expenses totaled $11.3 million, up from $8.7 million a year ago.
Financial Condition
At the end of third-quarter 2016, JA Solar had a cash balance of $298.2 million, compared with $445.1 million at 2015-end. Total long-term borrowings were $467.8 million as of Sep 30, 2016.
Guidance
JA Solar expects to ship 1.2–1.3 gigawatts (“GW”) of cells and modules in the fourth quarter of 2016, with essentially all being external shipments.
For 2016, the company has slashed its shipment guidance. The company currently expects to ship 4.9–5 GW of cells and modules, compared to the earlier expectation of 5.2–5.5 GW.
SolarCity Corp. , the largest U.S. rooftop solar installer, posted an adjusted loss of $2.27 per share in the third quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of $2.35. However, in the year-ago quarter, the company had incurred a loss of $2.10.
First Solar Inc. (FSLR - Free Report) reported third-quarter 2016 earnings of $1.22 a share, beating the Zacks Consensus Estimate of 69 cents by a wide 76.8%. The reported number, however, declined 64.2% from the prior-year figure of $3.41.
SunPower Corp. (SPWR - Free Report) reported third-quarter 2016 adjusted earnings of 56 cents per share, missing the Zacks Consensus Estimate of 67 cents by 16.4%. Reported earnings were, however, way higher than the year-ago figure of 3 cents.
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JA Solar (JASO) Beats on Q3 Earnings, China Shipments Down
JA Solar Holdings Co., Ltd. posted third-quarter 2016 adjusted earnings of 13 cents per diluted American Depositary Share (ADS), beating the Zacks Consensus Estimate of 3 cents by a wide margin.
Earnings, however, deteriorated from the year-ago figure of 65 cents by 80%.
Total Revenue
JA Solar’s revenues in the reported quarter were $624.3 million, comfortably beating the consensus mark of $586 million by 6.5%. Moreover, the reported figure improved 9% from the year-ago level on strong shipments to key markets, which exceeded the low end of the company’s guidance.
JA SOLAR HOLDGS Price, Consensus and EPS Surprise
JA SOLAR HOLDGS Price, Consensus and EPS Surprise | JA SOLAR HOLDGS Quote
Q3 Shipments
Total shipments in the third quarter of 2016 were 1,240.9 megawatts (“MW”), nearly all of which were modules and cells shipped to external customers. So, external shipments were also 1,240.9 MW, up 10.1% year over year.
The year-over-year improvement in external shipments was attributable to an 11.8% upside in module shipment. However, a 22.8% decline was witnessed in cells and cell tolling.
The increase in shipments came on the back of strong demand from South America, which constituted 20.2% of the quarter’s total shipment. Shipments to North America rose to 13% of the total, from 1% in the year-ago quarter. Europe, however, witnessed a considerable drop, having contributed 6.5% to total shipments, compared with 7.8% a year ago. Asia-Pacific (excluding China) markets also witnessed a slowdown with shipments constituting 25.8% of the total, a considerable drop from 36.3% a year ago. China also saw a decline with shipments constituting 32% of the total in the reported quarter, from 53.1% in the year-ago quarter.
Highlights of the Release
Gross profits were $86.1 million, down 15.2% year over year. Gross margin, also, contracted 440 basis points year over year to 13.8%.
Total operating expenses of $67.9 million represented 10.9% of revenues, compared to the year-ago figure constituting 9.9% of revenues.Operating profit was $18.2 million, compared with $44.9 million in the year-ago quarter.
Interest expenses totaled $11.3 million, up from $8.7 million a year ago.
Financial Condition
At the end of third-quarter 2016, JA Solar had a cash balance of $298.2 million, compared with $445.1 million at 2015-end. Total long-term borrowings were $467.8 million as of Sep 30, 2016.
Guidance
JA Solar expects to ship 1.2–1.3 gigawatts (“GW”) of cells and modules in the fourth quarter of 2016, with essentially all being external shipments.
For 2016, the company has slashed its shipment guidance. The company currently expects to ship 4.9–5 GW of cells and modules, compared to the earlier expectation of 5.2–5.5 GW.
Zacks Rank
JA Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Releases
SolarCity Corp. , the largest U.S. rooftop solar installer, posted an adjusted loss of $2.27 per share in the third quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of $2.35. However, in the year-ago quarter, the company had incurred a loss of $2.10.
First Solar Inc. (FSLR - Free Report) reported third-quarter 2016 earnings of $1.22 a share, beating the Zacks Consensus Estimate of 69 cents by a wide 76.8%. The reported number, however, declined 64.2% from the prior-year figure of $3.41.
SunPower Corp. (SPWR - Free Report) reported third-quarter 2016 adjusted earnings of 56 cents per share, missing the Zacks Consensus Estimate of 67 cents by 16.4%. Reported earnings were, however, way higher than the year-ago figure of 3 cents.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>