JinkoSolar Holding Co. Ltd. (JKS) reported impressive second quarter 2013 results, returning to a profit following seven quarters of losses buoyed by higher demand from new solar markets. This makes JinkoSolar the first Chinese module manufacturer to return to net profitability since the downturn.
Adjusted earnings per American depositary share ("ADS") were 56 cents (RMB 3.32), well above the Zacks Consensus Estimate of a loss per ADS of 7 cents, a diluted loss per ADS of 56 cents in the first quarter of 2013 as well as a diluted loss per ADS of $2.11 in the second quarter of 2012. Each “ADS” represents four ordinary shares.
On a GAAP basis, diluted earnings came in at 36 cents per ADS versus a loss per ADS of $2.20 in the year-ago period and 92 cents per ADS in the first quarter of 2013.
Quarterly Performance
JA Solar’s top line in the reported quarter was $287.6 million, easily surpassing the Zacks Consensus Estimate of $276 million. Total revenue also increased 47.6% annually and 53.6% sequentially backed by higher shipment of solar modules.
Total shipments during the quarter were 489.2 megawatts (“MW”), representing an increase of 61.9% year over year and 44.5% sequentially. Of the total shipments, 460.0 MW were solar modules, 11.1 MW were silicon wafers, and 18.1 MW comprised solar cells.
Gross margin stood at 17.7% in the reported quarter compared with 8.4% in the second quarter of 2012 and 12.7% in the first quarter of 2013 led by increased shipment volumes.
Total operating expenses in the quarter were $25.4 million, down 13.3% year over year and 3.8% sequentially.
Financial Condition
JA Solar at the end of the reported quarter had cash and cash equivalents and restricted cash of $73.9 million, up from $73.4 million at the end of Jun 30, 2012.
As of Jun 30, 2013, total short-term borrowings that included the current portion of long-term bank borrowings were $386.2 million compared with $366.5 million at the end of Jun 30, 2012. Total long-term borrowings were $62.4 million compared with $43.3 million in the year-ago quarter.
Guidance
JA Solar expects cell and module shipments in the range of 460 MW to 500 MW in the third quarter of 2013. The company boosted its total solar module shipments projection to the band of 1.5 GW and 1.7 GW (from 1.2 MW -1.5 MW) for 2013.
Peer Comparison
Recently, SunPower Corp.’s (SPWR) second quarter 2013 adjusted earnings per share of 48 cents comfortably exceeded the Zacks Consensus Estimate of 11 cents as well as the year-ago profit level of 8 cents. The company’s stellar results were backed by strong demand for its solar panels in utility, commercial and residential projects
Canadian Solar Inc.’s (CSIQ) adjusted second quarter 2013 loss per share of 29 cents was narrower than the loss of 59 cents in the second quarter of 2012.
First Solar Inc. (FSLR) reported adjusted second quarter 2013 earnings of 39 cents per share, well below the Zacks Consensus Estimate of 50 cents by 22% and 43.5% from the preceding quarter. The company’s reported number also saw a 74.3% decline from the year-ago period.
Zacks Rank
JinkoSolar presently retains a Zacks Rank #3 (Hold).
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