JA Solar Holdings Swings To Q3 Profit, Boosts 2014 Shipment Outlook

(RTTNews) - Chinese photovoltaic company JA Solar Holdings Co., Ltd. (JASO) reported Tuesday a profit for the third quarter compared to a loss last year, reflecting improved margins and revenue growth amid higher shipments.

Adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also provided shipment guidance for the fourth quarter and raised shipment outlook for the full-year 2014.

"JA Solar delivered strong results in the third quarter, as our strategic shift from cells to modules started to come to fruition. While we remain a leader in cell technology and cell manufacturing, higher margin module sales has become one of the key results drivers at JA," 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 153.24 million or $24.97 million for the third quarter, compared to a net loss of RMB 272.96 million in the prior-year quarter. Earnings per ADS was RMB 2.55 or $0.42, compared to loss per ADS of RMB 6.77 or $1.10 in the year-ago quarter.

Excluding items, adjusted earnings per ADS was RMB 1.30 or $0.21, compared to an adjusted loss per ADS of RMB 2.24 or $0.36 in the year-ago quarter.

On average, five analysts polled by Thomson Reuters expected the company to report earnings of $0.18 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter surged 71.8 percent to RMB 3.02 billion or $492.23 million from RMB 1.76 billion in the same quarter last year. Six Wall Street analysts had a consensus revenue estimate of $425.25 million.

The company attributed the strong sales growth to the ongoing shift in sales to modules, which were 88.3 percent of shipments, as well as penetration of our key geographies, most notably China and Japan.

Operating profit for the quarter was RMB 189.6 million or $30.9 million, compared to an operating loss of RMB 31.6 million or $5.2 million in the year-ago quarter.

Gross margin for the quarter improved 370 basis points 15.0 percent from last year's 11.3 percent, and operating expenses as a percentage of revenue declined 430 basis points to 8.8 percent from a year ago.

Total shipments for the quarter surged 57.0 percent to 785.4 megawatts or MW, from last year, with modules and module tolling shipments soaring 127.4 percent, while shipments of cells and cell tolling dropped 52.9 percent.

Additionally, the board of directors of the company authorized the repurchase of up to $90 million worth of its issued and outstanding American Depositary Shares prior to November 17, 2015.

Looking ahead, the company expects total cell and module shipments for the fourth quarter to be in the range of 850 MW to 900 MW.

The company also raised shipments guidance for the full-year 2014 to a range of 3.1 GW to 3.2 GW from the previous guidance in the range of 2.9 GW to 3.1 GW. However, the company now expects to ship 160 MW of modules to its downstream projects, compared with the previously guided 200 MW.

"We are confident in our guidance for the whole year, as well as our ability to sustain our current margin structure into Q4. We remain committed to tight expense control, and are optimistic about our growing penetration of the downstream project business," Jin added.

In Tuesday's regular trading session, JASO is currently trading at $8.28, up $0.48 or 6.15% on a volume of 5.56 million shares.