Why Solar Stocks Crashed Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Trina Solar (NYSE: TSL  ) and Yingli Green Energy (NYSE: YGE  ) have both fallen 11% today after Chinese solar competitor JA Solar (NASDAQ: JASO  ) reported earnings.

So what: JA shipped 500 MW worth of solar products, which topped its own estimate of 420 MW for the quarter. That led to revenues of $268.1 million, which topped Wall Street's estimate of $248.5 million. But the company lost $102.4 million, or 2.65 per share, when analysts only expected a $1.53 per share loss and investors sold off the whole industry as a result.  

Now what: The core problem is that higher shipments did little to help the bottom line. In manufacturing, higher utilization should have a big impact on margins, but Chinese solar manufacturers are selling panels at such discounted prices that they still can't make a profit. I wouldn't buy any Chinese solar manufacturer and this is just the latest reason why.

Interested in more info on JA Solar? Add it to your watchlist by clicking here.


Read/Post Comments (5) | Recommend This Article (3)

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  • Report this Comment On March 25, 2013, at 5:42 PM, foop200 wrote:

    Wow... what an enlightening couple of paragraphs. Do these authors actually get paid for this?

  • Report this Comment On March 25, 2013, at 8:59 PM, gr8grape wrote:

    Agreed with foop200. Mr. Hoium has had nothing constructive to say about chinese solars - but seems to cheer on doomed american solar manufacturers for his own personal gain.

  • Report this Comment On March 26, 2013, at 8:51 AM, radelph wrote:

    Mr Hoium will face the facts soon that Chinese solar have won the war, when the smoke clears. As TSL predicted they will be profitable in Q3. I assume Q1 and Q2 will improve on his prediction. US Trade Rep Ron Kirk has vacated his position ahead of the WTO decisions on WTO dispute resolution case DS437. What an embarrassment this will be when Chinese Solar anti-dumping charges are roll-backed.

  • Report this Comment On March 26, 2013, at 8:58 AM, RRobertsmith wrote:

    solar is doubling every year ...that is 72% increase EVERY YEAR...AND 12% A MONTH....move get out of the way!

  • Report this Comment On March 26, 2013, at 9:53 AM, dsong wrote:

    This article is partial. China solars are now consolidized. The excess productivity will reduce.

    The PV pannel price will be stablized.

    The margin will improve so as the profit.

    Now it is the best to load solar stocks.

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