Recovering Demand Boosts LDK Solar

By TESS STYNES
LDK Solar Co. posted a surprise profit for the third quarter amid growing demand for solar-energy products in recent months, as the Chinese maker of solar wafers and modules broke a string of three consecutive quarterly losses.
The company also projected fourth-quarter revenue of $280 million to $310 million. Analysts polled by Thomson Reuters on average recently expected $259 million.
Demand for solar products has been stabilizing in recent months as financing for projects improves, though prices are still down sharply amid plentiful supply. Some solar companies have returned to profitability recently, while most are seeing sales improve sequentially. LDK recently strengthened its financial position with the sale of a 15% stake in a polysilicon plant. The company has been cutting costs and scaling back expansion plans.
For the quarter ended Sept. 30, LDK reported a profit of $29.4 million, or 27 cents an American depositary share. A year earlier the company reported earnings of $88.4 million, or 77 cents an ADS. Analysts had projected a 10-cent loss.
Revenue climbed 48% to $281.9 million. The company last month boosted its target to $270 million to $290 million. Revenue was up 23% sequentially.
Gross margin fell to 20.1% from 22.7%.
Chairman and Chief Executive Xiaofeng Peng said, "In addition to reaching important milestones for ramping out polysilicon productions, we made great strides to diversify and grow our business and operating flexibility."
The company's polysilicon plant is in full production and its wafer plant is running at full capacity, he said. The company was awarded initial contracts to develop projects in various Chinese provinces and has formed a partnership in the Benelux region for a major rooftop installation, he said.
Wafer shipments rose 27%.