LDK Solar Co. Ltd. (LDK) reported third quarter 2010 earnings of 72 cents per share, easily surpassing the Zacks Consensus Estimate of 39 cents per share. The earnings also increased 166.7% from the prior-year quarter.
Quarter In Detail
LDK Solar recorded a sequential increase of 19.5% and a year-over-year increase of 139.7% in its revenues to $675.6 million, ahead of Zacks Consensus Estimate of $628.0 million. The increase reflected the diversification strategy in increasing contributions from the polysilicon, module and cell businesses.
Gross profit increased 164.1% from the previous year quarter to $150.0 million. Gross margins increased from 20.1% in the year ago quarter to 22.2%.
Income from operations increased 222.1% from the prior-year quarter to $119.5 million. Operating margins increased 4.5 percentage points from the year ago quarter to 17.7%.
Quarter Ahead
The company expects the revenues for the forthcoming quarter to be in the range of $710 million to $750 million. LDK Solar expects the gross margin to be in between 24% and 26%. For fiscal year 2011, the company expects its revenues to be in the range of $2.9 billion to $3.3 billion and gross margin to be in the range of 22% to 28%.
In Conclusion
Estimates for the quarter had been trending up in the run-up to the earnings release, with three analysts raising estimates in the last 30 days. The full-year estimate for next year has been trending up in recent days, with three positive revisions in the last thirty days. The Zacks Consensus Estimate for 2010 is $1.11 per share, which is bound to move up following the positive guidance.
We currently have a Zacks # 2 Rank for LDK Solar, which translates to a Buy rating in the short term.
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