LOS ANGELES (Reuters) - China’s LDK Solar on Thursday forecast disappointing second-quarter revenue as persistently weak demand and a global glut exert pressure on prices, sending its shares down more than 3 percent.
But the company, which competes with SunTech Power and Solon, raised its estimate for second-quarter wafer shipments slightly to 220-230 megawatts, citing improved demand late in the quarter.
It had previously forecast 200-220 megawatts. Analysts expect demand for solar wafers to pick up generally over the course of the year, but remain below that of past years.
LDK Solar -- which makes the wafers that go into solar power cells -- did not comment on prices in its Thursday statement. But a global recession, credit crunch, fierce competition and oversupply across the industry have walloped prices in general for manufacturers.
On Thursday, LDK forecast revenue of $215 million to $225 million in the quarter ended June 30, down as much as 25 percent from the first quarter’s $283.3 million and lagging analysts’ average forecast for $250 million, according to Reuters Estimates.
Shares in the company slid 3.3 percent to $10.55 after hours, extending a 3 percent slide in regular trade.
In May, LDK Solar posted a wider than expected first-quarter net loss of $22.5 million, or 21 cents a share, as the global credit crisis dried up funding for renewable energy projects.
Some analysts warn that the company may remain in the red in 2010.
“We estimate that higher-than-spot price production costs and particularly intense price wars for solar wafers will lead LDK to losses next year,” CLSA analyst Charles Yonts wrote on June 24, citing a “sell” rating on the stock.
“We do believe that LDK’s polysilicon plant will ultimately be able to produce at extremely low costs (about $30/kilogram) ... However, this will not occur before the end of 2011 and substantial execution risk remains.”
Other analysts were more upbeat on LDK Solar’s prospects, with production costs expected to dwindle while the company embarks on a huge capacity expansion.
The company said on Thursday it had clinched $146 million in loans from two Chinese lenders.
LDK Solar said its annualized wafer capacity hit 1.5 gigawatts at the end of the period, with a target of reaching 2.0 gigawatts by the end of this year.
“We are encouraged by the recent improvement in market demand and expect to resume the expansion of our wafer plant,” CEO Xiaofeng Peng said in the statement.
Reporting by Edwin Chan; Editing Bernard Orr
Our Standards: The Thomson Reuters Trust Principles.