Chinese solar wafer manufacturer, LDK Solar (NYSE: LDK) yesterday warned that its revenue for 4Q08 will be significantly lower than previously issued projections.
Based upon preliminary data for the quarter, LDK Solar estimates revenue to be in the range of $425 to $435 million and wafer shipments between 245 to 255 megawatts (MW). This compares to its previously issued guidance for 4Q08 of revenue in the range of $555 to $565 million and wafer shipments in the range of 260 to 270 MW. LDK also said gross margin is likely to be between 10% and 13%–not 18% and 21% as previously indicated.
Reuters reported that LDK shares dropped nearly 14% following release of the new figures.
During 4Q08, LDK Solar said it experienced lower demand as customers requested to delay shipments until 2009 in light of the current global economic crisis and tight credit markets. However, the decrease in overall wafer shipments during the quarter was partially offset by much higher than expected OEM wafer shipments.
The company also announced that it experienced a delay in ramping production at its polysilicon plant due to issues in the final stages of plant commissioning. The plant is expected to ramp up to its designed full capacity in mid 2009.
As a result of these dynamics affecting the global business environment, LDK Solar expects 2009 fiscal year results to be impacted by lower ASPs and lower wafer shipment volumes than previously anticipated.
The company’s updated outlook for the full year of fiscal 2009 includeds revenue in the range of $2.3 billion to $2.5 billion; wafer shipments in the range of 1.57 GW to 1.67 GW; and gross margin between 22% and 27%.
"Late in the fourth quarter, we experienced a slowdown in our business related to the current global financial crisis," stated Xiaofeng Peng, Chairman and CEO of LDK Solar. "Despite a difficult operating environment, we remain focused on executing our growth strategy and believe that our competitive positioning as the largest and lowest-cost wafer producers in the solar industry will provide us with a competitive edge for navigating through these challenging times. We continue to have a solid cash position, with more than $380 million, in addition to unused credit facilities totaling in excess of $850 million and will continue to conservatively manage our resources. Our operations remain at full capacity, with contract backlog remaining strong for 2009."
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