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: Shares of Yingli Green Energy Hold. Co. Ltd. (ADR) (NYSE:YGE) jumped as much as 37% early in trading after reporting earnings.
So what: First quarter earnings came out today (finally) and revenue came in at $468.7 million and net loss of $58.6 million was $0.32 per share. The top line easily beat the $454.6 million in revenue analysts expected but the loss exceeded the $0.24 loss modeled by Wall Street.
Yingli's CFO also said it may return to profitability in the second half of this year and that it's working on financing that would allow the company to fund operations long-term. Those are optimistic words but until we see either come to fruition I would be cautious.
Now what: Yingli Green Energy is still teetering on the brink of survival and simply getting more debt to fund operations isn't enough. The company has to improve margins and return to profitability, but that would take an industry wide improvement that would drive higher panel and project prices. But I don't see that happening this year, in part due to Yingli's own manufacturing expansion, and this is an extremely high-risk play in the solar industry right now. Too high of a risk for me to get into today.
Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.