Chinese solar firm LDK Solar Co Ltd slumped to a third consecutive quarterly loss and forecast lower-than-expected revenue for the current quarter, as weak demand and a steep fall in selling prices take a toll on the company’s margins.
LDK Solar, a major supplier of wafers and cells that are used to build photovoltaic panels, became the latest solar company to record impairment charges in view of mounting losses.
The solar industry was hit hard last year as prices halved for the equipment that turns sunlight into electricity, pushing many companies into losses and forcing First Solar, Suntech Power Holdings, JinkoSolar Holding Co and Yingli Green Energy to incur huge charges.
LDK Solar set a provision of $179.2 million for doubtful receivables and prepayments, citing a deteriorating solar market which affected its customers and suppliers.
The company said it expects revenue of $190 million to $230 million for the first quarter, below market expectation of $397.2 million.
“In 2012, we expect that excess capacity and further policy uncertainties in Europe and the US will result in continued intense competition within the solar industry,” Xiaofeng Peng, Chairman and CEO of LDK Solar, said in a statement.
LDK Solar, which had delayed reporting its fourth-quarter results, posted a loss of $588.7 million, or $4.63 per American Depositary Shares (ADS), compared with a profit of $145.2 million, or $1.09 per ADS in the year-ago period.
Net sales fell 54 percent to $420.2 million, while its recorded a negative gross margin of 65.5 percent for the quarter. It had recorded a positive 27.3 percent a year ago.
Analysts on average had expected the company to post a loss of 85 cents a share, on revenue of $431.6 million, according to Thomson Reuters I/B/E/S.
LDK Solar shares, which have lost nearly three-fourths of their value in the last year, closed at $2.96 on Friday on the New York Stock Exchange.
