(By Tim) Chinese silicon wafer manufacturer LDK Solar, Ltd. (NYSE: LDK) is expected to release the company‘s 2009 4th quarter and year-end financial reports on March 11, 2010.
The consensus estimate of the eight analysts that follow LDK is earnings of 12¢ on revenues of $301 million. This is a significant change from the 4th quarter of 2008, when the company posted a loss of $1.25 per share from $426.6 million in sales. The consensus hides the uncertainty of the expected earnings for the quarter. The estimates from the analysts following LDK range from a loss of 1¢ per share to an estimated profit of 21¢. The estimated revenue range is from $285.7 million to $311.5 million.
The earnings performance for LDK Solar has been all over the make for the last four quarters. The 4th quarter of 2008 and the first two quarters of 2009 saw the company with projected losses, then proceeded to "beat" those loses further to the downside. Then in the 3rd quarter, the company managed a surprise to the upside, earning 27¢ per share when the analysts were predicting a 10¢ loss. The fluctuation in earnings has been severe, losing $1.25, then just a 21¢ loss, then a $2.05 loss, then the 27¢ gain. Third quarter revenues were $282 million and during the conference call for those results, the management predicted revenues of $280 to $310 million for the 4th quarter. Looking at the range of analyst estimates, you can see they really went out on a limb with their revenue projections.
The solar energy business is a contrast of future global, renewable energy needs against a global economic recession and the need for government subsidies to currently make solar power competitive against fossil fuel energy. The current news in the sector can rapidly move share prices. Over the last six months, LDK has fluctuated between $5 and $10 per share. The company has spent and continues to invest serious money to increase its production capacity for a future that may not get here as fast as many hope. The other side of the coin is that if LDK Solar strings together two quarters of positive earnings, it may have turned to corner towards growing profitability. During the last conference call, management noted the company was still spending money faster than it was coming in, despite the turn to accounting profitability.
LDK is projected to earn 33¢ per share for all of 2010. If the earnings for the last two quarters of 2009 exceed that number, the analysts might start upgrading their expectations, giving the stock price a boost. A final note, LDK shares are ADRs of the China traded stock and company. The stock can also be affected by events in China and the local stock market.
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