JA Solar (JASO) Posts Higher Revenues

JA Solar Holdings Co. Ltd. (JASO) announced adjusted earnings per American Depositary Share (EPADS) of 18 cents in its second quarter, which fell short of the Zacks Consensus Estimate of 23 cents. However, results comfortably beat the year-ago adjusted loss per ADS of 18 cents.

Quarterly Performance

JA Solar’s revenues in the reported quarter were $351.2 million, compared to $281 million in the first quarter of 2010 and $88.6 million in the year-ago quarter. Revenues in the reported quarter also comfortably beat the Zacks Consensus Estimate of $300 million.

In the reported quarter, JA Solar’s sales to international customers expanded substantially to 46% of total revenues, an increase of 10% from the first quarter of 2010. The company’s has a strong presence round the globe in key markets, including Germany, Italy, U.S., Spain, India, Korea, China and Japan.

Total shipments in the second quarter of 2010 were 311 MW, compared with first quarter shipments of 272 MW, representing a sequential growth of 14%, primarily due to improvements in line throughput and yield. Gross margins increased to 23.1% in the reported quarter, from 22.9% in the first quarter of 2010.

Financial Condition

JA Solar at the end of the reported quarter had cash and cash equivalents of $324.6 million and total working capital of $535.9 million. The company’s total long-term bank borrowings were $174 million. The aggregate face value of the convertible bonds, due 2013, outstanding was RMB 1.5 billion ($228.2 million) at June 30, 2010.


JA Solar raised its shipments guidance range for fiscal 2010 to over 1.35 GW, compared with the prior guidance of 1 GW. Shipments in the third quarter of 2010 are expected to be approximately 375MW.

Our Take

JA Solar is one of the most cost-efficient solar producers in the world, with a geographically diverse customer base as well as silicon wafer supply agreements in place to feed its production. Positive factors include ongoing expansion programs, improving operating efficiencies, rising margins and higher conversion efficiency. In the reported quarter the company achieved a conversion efficiency of 19% for its high-efficiency proprietary “SECIUM” solar cells.

We currently have a long-term Neutral recommendation on the stock. JA Solar has a Zacks #2 Rank, a short-term Buy rating on the stock.

JA SOLAR HOLDGS (JASO): Free Stock Analysis Report

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