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Chinese solar panel manufacturer LDK Solar Co Ltd.’s (NYSE:LDK) shares lost over 7 percent after the company reported a much higher than expected loss for the first quarter as gross margins turned negative and sales plunged.
Earnings Report: LDK Solar Earnings: Swings to a Loss and Shares FALL HARD.
Loss for the first quarter was $135.8 million ($1.46 per ADS) compared to a net profit of $135.4 million ($0.95 per ADS) in the previous year. The loss was much higher than the $1.14 per share anticipated by analysts.
The company’s revenues declined 74 percent to $200 million against street expectations of $225.5 million.
LDK posted a gross margin of negative 66 percent “due to serious price erosion, which was steeper than expected,” Chief Financial Officer Jack Lai said during a conference call.
It forecast revenues during the second quarter of only $220 million to $270 million, decidedly off analyst expectations of $370.4 million.
The company has already cut 5,000 jobs this year, and expects to make further cost reductions by the end of the year to remain viable in the face of tough market conditions that have caused several solar companies across the globe to shut operations.
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