Yingli Green Energy Q2 Results Miss Estimates, Cuts 2014 Shipment Outlook

(RTTNews) - Chinese solar energy company Yingli Green Energy Holding Co. Ltd. (YGE) reported Wednesday a loss for the third quarter that narrowed from last year, reflecting improved gross margins and revenue growth amid higher shipments.

However, adjusted loss per share for the quarter came in wider that analysts' expectations, and quarterly revenues missed their estimates. The company also slashed its photovoltaic or PV module shipment guidance for the full-year 2014.

In Wednesday's regular trading session, YGE is currently trading at $3.33, down $0.23 or 6.46% on a volume of 4.15 million shares.

"I'm very pleased to report that we delivered another set of solid results in the second quarter of 2014 with an increase of 40.8% in our PV module shipments over the first quarter of 2014, which includes shipments for PV systems to the Company's own downstream power plants in China, and an overall gross margin of 15.6%, well in line with our previous guidance," Chairman and CEO Liansheng Miao said in a statement.

"We remain focused on returning to net profitability by improving our operating efficiency, reducing manufacturing costs and optimizing our geographical footprints," Miao added.

The Baoding, China-based world's largest vertically integrated photovoltaic manufacturer,reported a net loss of RMB 285.16 million or $45.97 million for the third quarter, narrower than RMB 320.85 million in the prior-year quarter. Loss per share and per American depositary share or ADS, also narrowed to RMB 1.64 or $0.26, from last year's RMB 2.05.

Excluding special items, adjusted net loss for the quarter was RMB 274.98 million or $44.33 million, compared to RMB 321.46 million in the year-ago quarter. Adjusted loss per share and per ADS was RMB 1.58 or $0.25, compared to loss per share or per ADS of RMB 2.05 last year.

On average, six analysts polled by Thomson Reuters expected the company to report a loss of $0.14 per share for the quarter. Analysts' estimates typically exclude special items.

Total net revenues for the quarter grew to RMB 3.41 billion or $549.50 million, from RMB 3.38 billion in the same quarter last year. Six Wall Street analysts had a consensus revenue estimate of $588.00 million for the quarter.

Sales of PV modules grew 1.6 percent to RMB 3.25 billion or $523.62 million from RMB 3.20 billion in the year-ago quarter.

Total PV module shipments were 887.9 megawatt or MW, including 71.8 MW shipments for PV systems to the company's own downstream power plants in China for which revenues were not recognized as required by U.S. GAAP for internal shipments.

The increase of PV module shipments was primarily due to the stronger demand in the global PV markets especially in China, UK and new emerging markets. The company noted that the cumulative PV module shipments exceeded 10 gigawatt or GW globally.

Overall gross margin for the quarter improved 380 basis points to 15.6 percent, while operating expenses as a percentage of total net revenues increased 250 basis points to 18.1 percent from last year.

"In the second quarter, we saw increased demand for Yingli Solar modules from our key markets, such as China, Japan, United Kingdom and other new emerging markets. In particular, our shipments to new emerging markets in the second quarter increased by approximately 18% quarter over quarter while customer base doubled compared with the second quarter of 2013," Miao noted.

Looking ahead to fiscal 2014, the company slashed its PV module shipment guidance to a range of 3.6 to 3.8 GW from the prior projection of 4.0 to 4.2 GW, based on current market and operating conditions, estimated production capacity and projected customer demand.

The company noted that it expects the demand for PV modules in China market to accelerate in the second half of 2014. It also expects to start construction of a total of 168 MW of downstream projects across China in the third quarter.