JA Solar Holdings surfs atop the high-demand wave.
On Wednesday the Chinese solar-cell maker reported earnings that rose 46.7% to $13.5 million, or 9 cents per share, from $9.2 million, or 11 cents per share, a year earlier. Sales climbed to $144.2 million from $47.9 million. Analysts polled by Thomson Financial on average had expected a earnings of 9 cents per share on sales of $117.8 million. Shares of JA Solar (nasdaq: JASO - news - people ) popped 3.2%, or 47 cents, to $15.05, in afternoon trading.
"The company's results were obviously a blowout," said ThinkEquity Partners analyst Budong Peter Peng, "they're producing at 110% of capacity which is very unusual among their competitors. It's not an easy thing to do and they're pulling it off, and they're doing beyond what everyone was expecting."
JA Solar expects sales of $990 million to $1.1 billion this year. The range jumps in front of analyst expectations of $520.4 million to $936.4 million, according to a Thomson Financial survey. It also said it has sufficient silicon supplies in place to cover a planned production ramp-up, and plans to open a research laboratory in California's Silicon Valley.
JA Solar shipped cells with over 50 megawatts worth of annual generating capacity last quarter, up from 13.7 megawatts during the fourth quarter of 2006. A one-megawatt plant running continuously at full capacity can power 778 households each year, according to the U.S. Department of Energy.
Though cost per watt, excluding silicon wafers, fell to 19 cents from 22.8 cents, overall cost of revenue more than tripled. Prices for silicon, the key component of solar-power products, have climbed sharply as demand from the solar and semiconductor industries outpaced production capacity. In addition, the dollar's declining value against the Chinese renminbi resulted in exchange losses of $7.9 million during the quarter. As a result, JA Solar's gross margins fell to 21.2% from 23.9% a year earlier.
Chief Executive and founder Samuel Yang said the past year provided extraordinary business growth for the company. JA Solar's strong results come weeks after two other China-based solar companies, Canadian Solar (nasdaq: CSIQ - news - people ) and Trina Solar (nyse: TSL - news - people ), posted strong quarterly results. (See: "Canadian Solar Is Growing" and "The Sun Shines On Trina") In late-February though Suntech Power Holdings (nyse: STP - news - people ) disappointed Wall Street with weaker-than-expected results. (See: "Suntech Eclipsed")
Elsewhere in the solar sector, Canadian Solar jumped 3.4%, ReneSola (nyse: SOL - news - people ) increased 0.2%, and Suntech Power grew 4.5%, although LDK Solar (nyse: LDK - news - people ) and Trina Solar dropped 4.8%, and 3.1%, respectively. State-side First Solar (nasdaq: FSLR - news - people ) and SunPower (nasdaq: SPWR - news - people ), rose 2.3 % and 6.5%, respectively. Evergreen Solar (nasdaq: ESLR - news - people )shares were down 0.1%.
