We've heard from the best. Now it's time to hear from the rest of the solar manufacturers. I'm cringing already.
The numbers are in
Part of the issue was a fast drop in module and cell prices at the beginning of the quarter and a lagging drop of poly and wafer prices. This put margin pressure on JA Solar, some of which is reversing itself in the third quarter, so investors can at least hope that this will be the bottom.
Management does see demand picking up in the third quarter, as certainty has returned in Germany and Italy. And the United States is also expected to grow into a major market, with as much as 2.5 GW of installations in 2011.
It gets worse
|Metric||Previous Guidance||Current Guidance|
|Revenue||$710 million-$760 million||$480 million-$500 million|
|Wafer shipments||500 MW-550 MW||410 MW-430 MW|
|Module shipments||200 MW-220 MW||75 MW-80 MW|
Despite high expectations for revenue and margins, LDK isn't going to be anywhere near where it originally thought. We'll know all of the details when earnings are officially released on Aug. 29.
Stick to quality
I've been telling investors to stick with only the highest-quality names in solar, and this quarter demonstrates why. First Solar
I've also said that vertically integrated companies will provide more shelter than suppliers, who are the first to be squeezed. JA Solar and LDK Solar showed just how bad it can get for suppliers in the solar sector. In China, Trina Solar
Speaking of Yingli Green Energy, check back on Monday for my take on the company's recently announced earnings. Here's a preview: It's one of the few impressive reports to come out of the solar sector recently.
And be sure to add you favorite solar stock to My Watchlist, and My Watchlist will find all of our Foolish analysis on the stock.