Gediminas Jasionis

JA Solar Holdings Co., Ltd. (NASDAQ: JASO) to move down?

by Gediminas Jasionis January 7, 2009
logo_ja.gifJA Solar Holdings Co., Ltd. (NASDAQ: JASO) stock dropped over 10% after the market opened today. The key reason for such a steep decline most likely was lowered earnings outlook announced yesterday. Although it is strange how the stock movement seems to have ignored the news yesterday, this might become a first drop point which indicates possible uptrend reversal.

According to JA Solar's announcement the company experienced a significant slowdown in orders. As a result the company reduced their revenue estimates by 33% to $124 million for the fourth quarter. This went far behind analyst expectations of around $201 million.

The whole solar market also experienced slowdown so the worsening performance of JA Solar is not a big shocker. Still, the company will most probably get their share price beat down significantly because of this. If their estimates are correct, this will be one of the worst quarters the company had over the last year. They have already incurred a loss over the third quarter 2008, despite significantly increased revenues. A consecutive loss under significantly reduced revenues might have lasting negative effect on the company‘s stock and negate the current attempt of recovery.

JASO_chart.png

Also at a difficult time like this, the company has appointed a new CFO. Ms. Anthea Chung will get a chance to put her 16 years of financial management experience to work when she tries to drive the company safely through these tough times. At this point it might take some time for the new management member to get acquainted with the company's financial situation before implementing any large scale changes, which could affect management's decision making ability.

References:

JA Solar Holdings Co., Ltd. (JASO) message board on HotStocked

http://www.jasolar.com/Web/index-en.asp

 

 

Comments 0

Type the characters that you see in the box (5 characters).