LDK Solar makes significant revisions to 2Q and 2011 guidance

In a single stroke, LDK Solar has wiped US$1 billion in expected revenue from its 2011 guidance on the back of significant price declines for bare wafers and solar modules. In the second quarter, LDK is planning US$55 to US$60 million of inventory write-downs, the largest so far of any PV manufacturer. Instead of expected 2011 revenue in the range of US$3.5-US$3.7 billion, the company expects full-year revenue to reach US$2.5-US$2.7 billion. Gross margin for the second quarter of 2011 is expected to be in the range of 1.5-2.5%, compared to a previous guidance range of between 22% and 26%. Revised revenue guidance is to be in the range of US$480-US$500 million, compared to its previous guidance range of US$710-US$760 million.

Wafer shipments in the second quarter are expected to be between 410MW-430MW, module shipments between 75MW-80 MW, in-house polysilicon production between 2,700MT-2,750MT and in-house cell production between 120MW-125MW.

Previously, LDK had guided shipments between 500MW-550MW; module shipments were anticipated to fall between 200MW-220MW, while its in-house polysilicon production was expected to be in the range of 2,650MT-2,750MT. In-house cell production was previously expected to be within the range of 120MW-130MW.

Under revised 2011 guidance, LDK expects wafer shipments between 1.8GW-2.0 GW, module shipments between 750MW-800MW, in-house polysilicon production between 10,000MT-11,000 MT, in-house cell production between 600MW-700 MW and gross margins between 15% and 20%. 

Significantly, in wiping US$1.0 billion from its revenue guidance for the full year, LDK has wiped just over 1GW (2.7GW-2.9GW) from its wafer shipment guidance.

However, module shipments are expected to rise slightly to between 800MW and 900MW.

In-house cell production is expected to be between 500MW and 600MW, a small decrease from previous guidance. Polysilicon production guidance remains the same.

Full-year gross margin is expected to be between 24% and 29%.

Overall, the revisions are some of largest yet seen from major PV manufacturers and are in stark contrast to LDK’s view of expected financial performance in previous guidance given only a quarter ago.