Chinese solar panel maker JA Solar Holdings Co Ltd reported a quarterly loss on Thursday due to plunging prices on solar equipment and cut its full-year sales forecast, sending its shares down more than 11 percent.
The solar industry has suffered through a dismal 2011 as a glut of inventory has sent prices of solar panels sharply lower, squeezing profit margins in the young industry.
Subsidy cuts in Germany, the world’s largest market for the photovoltaic solar modules, and uncertainty in Italy, the No. 2 market, caused a “sudden and severe disruption,” Chief Executive Peng Fang said.
“We saw the average solar module price drop more than 20 percent quarter over quarter,” he told a conference call.
The weakness in the solar industry, which has also hurt earnings from companies such as SunPower and Canadian Solar and pushed smaller rival Evergreen Solar into bankruptcy, stood in contrast to the surprisingly strong profits posted by Danish wind turbine company Vestas on Wednesday.
The second-quarter net loss at JA Solar was $35.4 million, or 22 cents per share, compared with a year-earlier profit of $28.8 million, or 18 cents per share.
Revenue rose 12 percent to $413 million, but fell short of the $418.6 million that analysts had forecast.
Earlier this month, JA Solar forecast second-quarter profit margins in the “negative low single digit range” due to weak prices and inventory provisions.
While the steep drop in solar module prices has helped reduce the costs and attracted more demand for the renewable energy source, JA said it had cut its forecast for full-year shipments to 1,800 MW from its previous target of 2,200 MW.
The Shanghai-based company said its third-quarter shipments would climb to 450 to 470 Megawatts from 401 MW in the second quarter.
Shares of JA Solar have slumped 44 percent this year and were trading at five times 2012 earnings estimates as of Wednesday’s close.
On Thursday, the shares fell 11.6 percent in pre-market trading to $3.45
