JA Solar Holdings Q1 Results Miss Estimates, Backs 2015 Shipment Outlook

(RTTNews) - Chinese photovoltaic company JA Solar Holdings Co., Ltd. (JASO) reported Monday a profit for the first quarter that dropped 57 percent from last year, despite a revenue growth amid higher shipments, reflecting lower operating margins.

Both adjusted earnings per share and quarterly revenues missed analysts' expectations. The company also provided shipment guidance for the second quarter and reaffirmed shipment outlook for the full-year 2015.

"Our first quarter shipments were in line with our expectations during a seasonally slow period. During the quarter, our gross margin held up well due to reduced material costs and high demand from the Japanese market, where pricing was better than expected," Chairman and CEO Baofang Jin said in a statement.

The Shanghai, China-based manufacturer of mono-crystalline solar cells reported net income attributable to JA Solar Holdings of RMB 35.53 million or $5.73 million for the first quarter, down from RMB 82.63 million in the prior-year quarter. Earnings per ADS declined to RMB 0.59 or $0.10 from RMB 1.41 or $0.23 in the year-ago quarter.

Excluding items, adjusted earnings per ADS was RMB 0.82 or $0.13, compared to RMB 1.99 or $0.32 in the year-ago quarter. Earnings per share attributable to ordinary shareholders was RMB 0.16 or $0.03, compared to RMB 0.40 last year.

On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.06 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter increased 5.6 percent to RMB 2.40 billion or $387.70 million from RMB 2.78 billion in the same quarter last year. Five Wall Street analysts had a consensus revenue estimate of $410.14 million.

The company attributed the sales growth was driven by strong demand in the Japanese and European markets.

Operating profit for the quarter was RMB 149.6 million or $24.1 million, down from RMB 160.9 million or $26.0 million in the year-ago quarter.

Operating margin for the quarter contracted 90 basis points 16.1 percent from last year's 16.7 percent, as gross margin declined 60 basis points and operating expenses as a percentage of revenue increased 40 basis points from a year ago.

Total shipments for the quarter grew 6.8 percent to 681.5 megawatts or MW, from last year, with modules and module tolling shipments surging 50.5 percent, while shipments of cells and cell tolling dropped 61.1 percent.

Looking ahead, the company expects total cell and module shipments for the second quarter to be in the range of 680 MW to 720 MW.

The company also continue to project shipments for the full-year 2015 to be in a range of 3.6 GW to 4.0 GW. However, the company now expects to ship 200 MW of modules to its downstream projects, compared to the previously projected 200 to 300 MW range.

"We are confident that our strong manufacturing and sales execution, growing downstream project portfolio, and continued geographic expansion will be key growth drivers for us moving forward. These, combined with the expected pick-up in demand in the second half of the year, leave us very optimistic about the remainder of 2015 as we continue to build on our leadership position in the industry," Jin added.

The company said it expects to see stronger demand in the second half, particularly in China and North America, and are currently working to establish a new cell manufacturing facility in Malaysia.

JASO closed Friday's regular trading session at $10.11, up $0.03 on a volume of 1.57 million shares.