August 20, 2014 / 12:45 PM / 3 years ago

UPDATE 2-JA Solar plans to set up factories in N. America

* Raises FY shipments forecast to 2.9-3.1 GW from 2.7-2.9 GW

* 2nd-qtr revenue rises 53 pct to $390.5 mln vs est $394 mln

* Adj earnings $0.14 per ADS vs est of $0.21

* Operating expenses rise 72 pct (Adds comments from the company president, analyst; updates shares)

By Shubhankar Chakravorty

Aug 20 (Reuters) - Chinese solar products maker JA Solar Holdings Co Ltd expects to set up manufacturing plants in North America next year as the United States expands anti-dumping duties on products made in China and Taiwan.

JA Solar shares fell as much as 6.6 percent after the company reported a lower-than-expected quarterly profit, hurt by weak prices of modules in China and rising expenses.

The United States extended tariffs to Taiwan last month after Chinese companies tried to sidestep the duties by moving production to Taiwan.

“For next year we are currently variegating our overseas production options, especially ... setting up our factories in North America, South East Asia, for new capacity addition for 2015,” JA Solar President Jian Xie said on a conference call.

ReneSola Ltd said last week it plans to expand its production capacity through contract manufacturers in India, South Korea, Turkey and parts of Europe.

JA Solar reported gross margins of 15.2 percent for the second quarter, down from 16.7 percent in the first quarter, as prices for solar modules fell in China.

The company’s average selling price (ASP) for modules was 58 cents in China, which makes up 26 percent of the company’s shipments. In Japan, the ASP was 67-68 cents.

S&P Capital IQ Equity Research analyst Angelo Zino said analysts expect a 10-15 percent decline in ASPs for the solar industry for the rest of the year.

For JA Solar, with greater percentage swing in shipments towards China, that’s gonna hurt the margins and the ASPs, Zino added.

JA Solar raised its full-year total shipments forecast to 2.9-3.1 gigawatts (GW) from 2.7-2.9 GW.

The company said it expects third-quarter shipment of 730-760 MW, up from 681.8 MW it shipped in the second quarter.

Shipments of modules shot up to 445 MW in the second quarter from 388 MW in the first quarter.

Revenue rose 53 percent to $390.5 million from a year earlier. Analysts on average had estimated $394 million, according to Thomson Reuters I/B/E/S.

JA Solar reported a net profit of $6.5 million, or 10 cents per American Depositary Share (ADS), in the quarter ended June 30, compared with a loss of $21.3 million, or 58 cents per ADS, a year earlier.

Excluding one-time items, the company earned 14 cents per ADS, below the average analyst estimate of 21 cents.

Operating expenses rose 72 percent to $44.8 million from a year earlier.

JA Solar shares were down about 5 percent at $9.53 on the New York Stock Exchange on Tuesday. (Reporting By Shubhankar Chakravorty in Bangalore; Editing by Simon Jennings and Don Sebastian)

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