LDK shares slide after issues revenue warning
LOS ANGELES (Reuters) - Solar wafer maker LDK Solar Co Ltd warned on Monday of lower-than-expected fourth quarter and 2009 revenue, saying the global economic crisis and tight credit markets have weakened demand for solar power, sending its shares down nearly 14 percent.
The Chinese company also said it experienced a delay ramping up production at its new polysilicon plant. Polysilicon is the solar industry's key raw material.
"Late in the fourth quarter, we experienced a slowdown in our business related to the current global financial crisis," Chief Executive Xiaofeng Peng said in a statement, adding that contract backlog was still strong for 2009.
LDK's silicon-based wafers are used to make solar cells, the devices that turn sunlight into electricity. The company has said its customers include Q-Cells SE, Suntech Power Holdings Co Ltd and Sharp Corp, among others.
LDK's warning is the latest in a string of dour announcements in the burgeoning solar industry. Despite growing global interest in alternative energy sources and concerns about global warming, the global credit crisis and pullbacks in generous government solar subsidies have hampered demand for the clean energy source, particularly in recent weeks.
Earlier on Monday, U.S. solar company Evergreen Solar Inc said it closed its pilot manufacturing plant, in part to cut costs, and would take $25 million in related charges.
LDK expects fourth-quarter revenue of $425 million to $435 million. It previously forecast revenue of $555 million to $565 million for the quarter.
For 2009, the company expects revenue of $2.3 billion to $2.5 billion, down from an prior view of $2.9 billion to $3.1 billion.
LDK also lowered its gross margin and shipment forecasts for both the fourth quarter and 2009.
LDK also expects to produce between 3,000 and 5,000 metric tons of polysilicon in 2009, down from a prior view of 5,000 to 7,000 metric tons.
LDK has been building a polysilicon plant adjacent to its solar wafer facility in Xinyu City, China, to help offset high costs on the raw material.
LDK shares fell to $12.80 in extended trading after closing at $14.84 on the Nasdaq.
(Reporting by Nichola Groom; Editing by Andre Grenon)
