JA Solar announces strong first quarter results with an optimistic outlook for Q2 and beyond

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JA Solar Holdings’ financial results for its first quarter 2011 have revealed a profitable quarter that even surpassed some Wall Street analysts’ expectations. The company posted total revenue for the quarter of US$556.4 million, which, although shows a 5.5% sequential decrease from 2010’s fourth quarter results of US$588.9 million, still comes in 91.2% higher in a year-over-year comparison with 2010’s first quarter US$290.9 million result.

Shipments in Q1 amounted to 451MW.  Compared to Q4’s 463MW, Q1 results showed a 2.6% sequential dip, but year-over-year the company increased its shipments by 65.8% from Q1 2010’s 272MW. JA Solar’s gross margin also saw a sequential and year-over-year hit, totaling 17.3% in Q1, below Q4’s 19.2% and Q1 2010’s 23%. Gross profit was US$96.3 million in Q1, compared to Q4’s US$113.1 million. However, when compared to Q1 2010’s US$67 million gross profit, the year-over-year gross profit grew by 44%.

JA Solar finalized its operating income for Q1 at US$83.3 million, contrasted to 2010’s fourth quarter operating income of US$90.2 million and Q1 2010’s US$54.1 million. The company saw its net income for 2011 first quarter beat some analysts’ predictions by improving almost 90% with US$71.8 million or US$0.41 per American Depositary Share.

“Despite the seasonally weaker first quarter and uncertainties surrounding Italy's solar policies, our first quarter performance illustrates that our strategic partners continue to recognize our clear market leadership on costs and technology,” said Dr. Peng Fang, CEO of JA Solar. “Shipments in the first quarter were slightly below our previously announced estimates, primarily due to factory shutdowns during the week-long Chinese New Year holiday which had a stronger impact than anticipated on solar cell production output and shipping schedules. However, overall shipments for the quarter remained more or less in line with production volume. This sustained demand for our products highlights the success of our strategy of developing long-term strategic partnerships with the leading solar players across the global solar markets. Underpinning this is our unique position as the industry's low cost leader, and we are confident that in the future we can achieve even greater production efficiencies and drive costs down further.”

Company officials stressed that JA Solar remains optimistic maintaining its full year guidance with cell and module shipments still expected to exceed 2.2GW in 2011. JA Solar VP, Ming Yang, advised that he is keeping a positive outlook for the company’s overall shipments, especially now that the Italian FiT has been finalized. He advised that JA Solar is seeing promising activity for its order inquiries, particularly from Germany. However, Yang acknowledged that it would take a few weeks for the Italian market to restart, but the company expects cell and module shipments during Q2 2011 to reach above 400MW.

Dr. Fang added, “For the quarter and year ahead we remain focused on building new and productive partnerships that enable us to expand our market presence in key geographies. In particular, we are excited about the high growth potential of the US market and have already secured a number of promising US-focused partnerships, such as our solar cell joint venture with MEMC. These partnerships give us valuable exposure to the utility scale project market and enable us to rapidly grow our US footprint. We are similarly well positioned in China, where our status as one of the largest and most-respected players in the industry will enable us to take advantage of opportunities as the market expands.”

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