JA Solar (JASO) reported a mixed quarter and mixed guidance.
Revenue came in above Street estimates ($180.3 million vs. $170.4 million consensus), but EPS was light ($0.14 vs. $0.15 consensus). The company maintained 2008 revenue guidance in the Chinese yuan despite the upside this quarter (increased in USD). On a postive note, the company also increased 2009 revenue guidance significantly: $2.0B – $2.2 billion vs. $1.7 billion consensus.
AmTech solar analyst John Hardy is understandably not overly impressed with the earnings results. But he weighs the new 2009 guidance heavily. Here are Hardy’s 4 key takeaways from the quarter:
- Strong quarter on the top-line coupled with gross margins 200 bps better than our estimate. EPS came in light of consensus due to increased financing charges. Bottom line messy due to capped call convert; will have to wait for the call for further clarification.
- 2008 Guidance maintained in RMB and increased in USD, consensus ’08 revenue numbers need to come up slightly. Our revenue estimate likely comes up a touch as well.
- 2009 guidance VERY strong. Revenue guided ~23% higher than consensus at the mid-point. Implied ASPs guidance is $3.00/w which is down ~10% from where we think the blended ’08 ASP comes in. This is in-line with our estimates and better than feared by bears of down 15-20%. Will wait for clarity on % of fixed price agreements on the call.
- The stock is mixed pre-open as people weigh messy bottom line in Q208 with very strong ’09 guidance. We would look more at the strong guidance at this point given fundamental impact and the need for estimates to come up tomorrow.
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