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Weathering The Attack: JA Solar Announces Q1 2012 Results

June 5, 2012

January 2012 through March 2012 has been an unrelenting beat down for solar industry. The earnings results reported for these three months have been nothing short of brutal. But JA Solar (JASO :NYSE) might be the winning company for the quarter as the company trumped its estimates for shipments and improved its operating loss from the previous quarter.

For Q1 2012, JA Solar shipped 366 megawatts (MW), topping their high end guidance of 350 MW and only 8.1 percent less than shipments in Q4 2011.

Gross margins also improved to 2.1 percent. This is a major accomplishment for the solar manufacturer considering they included provisions for potential $2.9 million charge for countervailing and anti-dumping duties in the United States.

Operating loss for the quarter also substantially improved as JA Solar reported $25.3 million, a significant improvement from the $77.4 million reported in Q4 2011.

The improvements to operational losses helped shrink the net loss $39.8 million or $0.20 per ADS, once again a significant improvement from the $0.39 per ADS loss reported in the previous quarter.

Overall JA Solar attributes its success to what it believes are strong selling markets in Germany and Italy. But the company realizes it can’t focuses on these seemingly limited markets as they noted they will be concentrating their sales efforts on new markets including Japan, India, and Middle East. All three of the markets, and especially Japan, can definitely help the company in the near term break its dependence on selling in Europe.

Whether JA Solar can continue this momentum will surely be tested in the next quarter as the company reiterated its guidance of total cell and module shipments to be between 420 MW and 440 MW. And despite the guidance win in Q1 2012 JA Solar did not update their full year guidance of 1.8 GW to 2 GW.

Investors are seeing the light with this stock as shares were up 12.36 percent in afternoon trading. 

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