Earnings for China's LDK Solar Far Outshine Estimates

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LDK Solar (LDK), a Chinese maker of solar wafers, modules and cells, reported third-quarter earnings late Monday that easily beat analyst estimates on strong demand and improved pricing environment. The company also raised its outlook much above expectations.

"Our results for the third quarter were strong by all measures," said Chairman and CEO Xiaofeng Peng. "We delivered a second consecutive quarter of record revenue as strong industry demand coupled with an improved pricing environment drove better than expected results."

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LDK's revenue more than doubled from $281.9 million in last year's quarter to $675.6 million in the third quarter, topping estimates of $628.1 million. Profits rose from $29.4 million, or 27 cents per share, last year to $93.4 million, or 72 cents a share, for the past quarter. Earnings crushed Street estimates of 43 cents. Income from operations increased 222%, and gross margins improved as well.

"We are benefiting from our diversification strategy as we see increasing contributions from our polysilicon, module and cell businesses," said Peng. "As we gain further traction in these areas, we expect to experience enhanced top line and earnings growth."

For the current quarter, LDK sees much better-than-expected revenue of $710 million to $750 million. The consensus is $593.5 million. For 2011, despite expectations of a generally softer market, LDK sees revenue of $2.9 billion to $3.3 billion, again far above the consensus view of $2.21 billion. Shares of LDK have surged 93% year-to-date and 135% over the past 12 months. Its shares were up nearly 9% in premarket trading after the earnings announcement.

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