LDK Solar, the second-biggest maker of solar wafers, reported fourth-quarter sales at the bottom end of its forecast after component prices slumped.
Revenue totaled $440 million to $450 million, compared with the $440 million to $520 million forecast by LDK and $921 million a year earlier, the Jiangxi, China-based company said today in a statement. LDK will report audited earnings April 12.
Solar developers have reduced orders for components after European nations cut subsidies for renewable-energy projects, resulting in a glut of plant parts. Prices for solar modules declined almost 50 percent last year, according to London-based researcher Bloomberg New Energy Finance.
LDK shipped 215 megawatts to 220 megawatts of wafers in the fourth quarter, within a forecast range of 200 megawatts to 270 megawatts, the company said. The manufacturer, which has dropped 59 percent in New York trading in the past year, expects to write down inventories and may report a negative gross margin.
LDK is among Chinese solar companies that are expanding even after prices fell, aiming to grab market share as smaller rivals are driven out of the business. In January LDK bid about 24.2 million euros ($32 million) for Germany’s Sunways AG. In November it said it’s building a polysilicon factory that will help triple its output of the material for photovoltaic cells.
‘Reckless’ growth
LDK’s American depositary receipts fell 5.5 percent to $4.63 at the close in New York, the biggest drop in a month. Each receipt represents one ordinary share.
“LDK Solar’s reckless drive to expand has made its business model unsound,” Hari Chandra Polavarapu, an analyst at Auriga USA LLC in New York, wrote in a report in January. The solar industry faces unstable policies and irrational pricing, he said.
In November, LDK reported a third-quarter net loss of $114.5 million on sales of $471.9 million. The company didn’t release fourth-quarter income data today.
Sales will be $2 billion to $2.7 billion this year, and shipments of cells and modules will reach as much as 1,300 megawatts, according to the statement.
The world’s largest maker of solar wafers is GCL-Poly Energy Holdings.
