A Tough Day for LDK

That solar freeze I've been talking about? LDK Solar's (NYSE: LDK  ) feeling it, big time.

For one, LDK was forced to take by far the largest inventory charge of any solar company I follow. Whereas Trina Solar's (NYSE: TSL  ) charge amounted to $17 million, JA Solar's (Nasdaq: JASO  ) came in at $11 million, and Suntech Power (NYSE: STP  ) took around a $51 million provision for inventory and purchase commitments, LDK's number topped $200 million. But we knew that already.

As we've discussed with regard to the impairment charges oil and gas companies are choking down, these inventory charges are non-cash in nature. Still, the writedowns reflect a very real decline in near-term profitability.

With those rough fourth-quarter results, and first-quarter revenues projected to fall another 40% sequentially, LDK had to take a hatchet to its previous capex plan, which it has now reduced to roughly $200 million for 2009. That means LDK, for all of next year, will spend less than half of the capital it expended in the fourth quarter alone. (Incidentally, that Q4 figure exceeded net sales in the period)!

The company has thus followed Suntech's lead and set its phasers to pause. LDK is putting the finishing touches on its 1,000-metric-ton polysilicon plant, and the first 5,000-ton train of the 15,000 metric ton facility, but that's it for expansion in 2009. Capacity will remain around the 1.5 gigawatt level.

LDK shares continue to plumb new depths by the day. If you're keen on a solar recovery in 2009, I think there are better places for your money, such as SunPower (Nasdaq: SPWRA  ) (Nasdaq: SPWRB  ) or Energy Conversion Devices (Nasdaq: ENER  ) .