Yingli Green Energy Q3 Loss Narrows, Cuts 2014 Shipment Outlook

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

Adjusted loss per share for the quarter also came in narrower than analysts' expectations, while quarterly revenues missed their estimates. The company also slashed its photovoltaic or PV module shipment guidance for the full-year 2014.

"I'm very pleased to report that we delivered another set of solid results in the third quarter of 2014 with a gross margin of 20.9%, well ahead of our previous guidance, and a strong PV module shipment of 903 MW," Chairman and CEO Liansheng Miao said in a statement.

"We continue to successfully improve our operating profitability through on-going efforts on cost reduction and effective operating expenses control. The operating income in the third quarter of 2014 turned into positive for the first time since the second quarter of 2011," Miao added.

The Baoding, China-based world's largest vertically integrated photovoltaic manufacturer,reported a net loss of RMB 122.85 million or $20.01 million for the third quarter, narrower than RMB 235.59 million in the prior-year quarter. Loss per share and per American depositary share or ADS, also narrowed to RMB 0.68 or $0.11, from last year's RMB 1.50.

Excluding special items, adjusted net loss for the quarter was RMB 112.00 million or $18.25 million, compared to RMB 226.62 million in the year-ago quarter. Adjusted loss per share and per ADS was RMB 0.62 or $0.10, compared to loss per share or per ADS of RMB 1.45 last year.

On average, seven analysts polled by Thomson Reuters expected the company to report a loss of $0.13 per share for the quarter. Analysts' estimates typically exclude special items.

Total net revenues for the quarter declined to RMB 3.39 billion or $551.52 million, from RMB 3.65 billion in the same quarter last year. Six Wall Street analysts had a consensus revenue estimate of $655.88 million for the quarter.

Sales of PV modules decreased to RMB 3.18 billion or $518.22 million from RMB 3.21 billion in the year-ago quarter.

Total PV module shipments were 903.4 megawatt or MW, including 109.0 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 key global PV markets especially in China, Japan and other new emerging markets.

Overall gross margin for the quarter improved 720 basis points to 20.9 percent, and operating expenses as a percentage of total net revenues decreased 60 basis points to 15.0 percent from last year.

"In order to seek a balance between our shipment volume and profitability, we decide to revise our shipment guidance for full year of 2014 to 3.3-3.35 GW," Miao noted.

Looking ahead to fiscal 2014, the company slashed its PV module shipment guidance to a range of 3.30 to 3.35 GW from the prior projection of 3.6 to 3.8 GW, based on current market and operating conditions, estimated production capacity and projected customer demand.

The company noted that it has signed a landmark agreement to supply 120 MW of solar panels for one project in France, which will be the largest solar power park in Europe upon its completion.

The company said it now expects to develop about 400 MW of PV projects by the end of 2014, based on the current project development status and the progress of project pipelines.

YGE closed Monday's regular trading session at $2.99, down $0.04 on a volume of 3.47 million shares.