NEW YORK JA Solar Holdings Co Ltd posted a better-than-expected quarterly profit, but said its second quarter sales would slow because of a cut to renewable energy subsidies in Italy.
JA Solar, the No. 2 maker of solar cells behind Suntech Power Holdings, said it stuck by its full-year sales forecast, despite the weakness expected in second quarter.
Its forecast was similar to that of First Solar, which is hoping to grow in markets outside Europe to offset the cuts to subsidies there. It announced a new Chinese partnership earlier on Tuesday.
Last week, Italy pared back the generous solar power incentives that had made it the world's second largest market behind Germany, feeding fears that an oversupply of solar modules could pressure prices and margins in the industry.
JA Solar's net income in the first quarter rose to $71.8 million, or 41 cents per American Depositary Share (ADS), from $38.4 million, or 25 cents per ADS, a year ago.
Analysts had expected earnings of 31 cents per ADS, according to Thomson Reuters I/B/E/S.
Revenue nearly doubled to $556.4 million, slightly higher than the $551.7 million that analysts had forecast.
Average selling prices for solar cells has been declining amid fast-rising global manufacturing capacity that has threatened to create a glut of the renewable energy products this year.
Shipments in first quarter jumped 66 percent to 451 megawatts from the previous year, slightly below the company's estimates, and would be above 400 MW in the second quarter.
JA Solar stuck to its forecast that total cell and module shipments would top 2,200 MW in 2011, an increase of approximately 50 percent compared to 2010.
In addition to solar cells, the company has also expanded into making solar wafers, which are turned into cells, and the modules that are installed on rooftops and in large arrays.
Shares in JA Solar rose 2 percent in premarket trading.
(Reporting by Matt Daily in New York and Krishna N. Das in Bangalore; Editing by Maju Samuel and Derek Caney)