JA Solar (Nasdaq: JASO) reported fourth quarter earnings this morning and it didn't do anything to ease the market's fears about solar stocks. Like most manufacturers, JA Solar reported a huge drop in revenue, a big loss, and a drop in shipments. But compared to other low-tier suppliers, JA Solar isn't looking so bad.

To the numbers
Shipments were down 10.6% for JA Solar, revenue was down 21.4%, and the company barely squeaked out a positive gross margin of 0.5%. That's not good, but when compared to other companies at the bottom of the solar food chain it doesn't look too bad.

  Shipments (sequentially) Revenue (sequentially) Gross margins Net (in millions)
JA Solar (10.6%) (21.4%) +0.5% ($68.3)
JinkoSolar (NYSE: JKS) (11.9%) (32.7%) (4.4%) ($58.3)
Hanwha SolarOne (Nasdaq: HSOL) (5.9%) (31.9%) (20.1%) ($137.0)
Renesola (NYSE: SOL) +3.5% (0.7%) (23.1%) ($36.7)

Source: Company earnings reports.

JA Solar is kind of in no man's land, stuck between top-tier suppliers in China and third-tier suppliers like JinkoSolar, Hanwha SolarOne, and Renesola. That may not be a bad thing, if the company can continue to turn out higher-efficiency panels and cut costs. In fact, of these four, I give JA Solar the best chance at recovering and becoming a long-term solar player.

Where JA Solar does have an advantage, even over the much larger Suntech Power (NYSE: STP), is on the balance sheet. JA Solar ended 2011 with $550 million of long-term borrowings offset by $617.9 million in cash, a relatively strong position when you consider competitors' balance sheets.

I'm not ready to vault JA Solar into the ranks of the top Chinese solar manufacturers yet, but the company is making progress compared to some competitors. If that continues for the next quarter or two and we see the consolidation everyone is predicting, this could become a stock worth looking at again.

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