In the first quarter, revenue was $766.3 million, up 120.5% from last year but down 16.8% sequentially. Wafer shipments were up slightly to 631.5 MW in the quarter but module shipments dropped to 118.7 MW from 157.2 MW last quarter in a step away from vertical integration.
But investors are focusing on the fact that LDK said it expected revenue to be between $710 million and $760 million in the second quarter, below the $783 million analysts expected.
On the plus side, even though module shipments were down, gross margins increased to 31.5% from 27.3% in the fourth quarter.
Earnings have been uneven at best for solar manufacturers in the first quarter. For the most part, module shipments have been down for most manufacturers, but earnings have beaten expectations. Chinese competitors JA Solar
LDK Solar's earnings haven't impressed the market, but the company ended the first quarter with $515.1 million in cash, it just sold a portion of its polysilicon business for $240 million, and the company is profitable. LDK isn't taking the path of Chinese manufacturers like Trina Solar
LDK hasn't exactly been reliable with estimates, so I'm a little surprised the market is putting so much stock in these numbers. In the fourth quarter, the company raised estimates only to have to lower them in the first quarter, and I wouldn't be surprised if management was a little skittish about overpromising again.
I'm not ready to throw any real money at LDK considering the heavy debt load and uncertainty in the industry, but I will keep my thumbs-up rating on CAPS to follow the stock and will definitely keep it in My Watchlist.
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