The haves and the have-nots of the solar industry are starting to separate themselves, but those in the latter category are still holding on for dear life. LDK Solar
LDK said that it expects to report $440 million to $450 million in revenue, wafer shipments of 215 MW to 220 MW, and module shipments of 250 MW to 260 MW. The revenue number falls at the low end of its old guidance, but the module shipments guidance is near the top end of previous guidance. That likely means that margins will be negative, just as they were last quarter, and may not meet the 2% to 7% gross margin management expected. When an inventory write-down is included, something many companies have done in recent quarters, we do know that management is expecting negative gross margins.
The big question for LDK is: What will adjusted gross margins look like compared to other solar companies? Leading manufacturers like SunPower
Investors haven't met LDK's preliminary numbers with a lot of enthusiasm. As I'm writing this, the stock is down 4.5% for the day. In the bigger picture, if consolidation is indeed going to take place in the solar industry, one of these weaker players is going to have to crumble -- and LDK Solar, expecting revenue at the low end of guidance despite shipping more modules, isn't good news. Now the question may become: How long will Chinese banks allow the company to maintain its massive short-term debt load while losing money on everything it makes?
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