JA Solar shares dropped 96 cents, or 28.74 percent, to $2.38 per share. The stock was down more than 5 percent in after-hours trading.
Chinese bellwether solar companies Trina Solar and Suntech announce earnings next week. Trina shares on Wednesday dropped $1.39, or 12.39 percent, and Suntech’s declined $2.46, or 19.42 percent.
JA Solar lost $21 million, or 36 cents per share, in the third quarter, compared with a profit of $24.4 million, or 17 cents per share, a year earlier. Analysts had expected a profit of 9 cents per share, according to a survey by Thomson Reuters.
JA Solar said the Lehman Brothers bankruptcy had a “material impact” on its third-quarter earnings. Adjusting for that and other one-time losses, JA Solar made profits of 24 cents per share. Analysts had predicted adjusted earnings of 27 cents per share.
Revenue increased 149 percent to $312 million, compared with $125.2 million a year ago. But the combination of a decline in the euro and tighter credit put downward pressure on solar module pricing, said Mr. Garcia.
The weak euro makes it more expensive for European customers, which account for about 75 percent of worldwide solar demand, to import solar products from abroad. And many large solar projects depend on debt financing.
Collin Rusch, analyst with American Technology Research, said Spain’s temporary repeal of solar power subsidies in the second half of the year is also hitting the industry. Spain accounts for about a quarter of the worldwide solar market. Those subsidies will be reinstated beginning next year, but they’ll be capped at 500 megawatts.
“All these trends were not unexpected, but the fact that they happened simultaneously was unexpected,” said Mr. Rusch.
Still, Mr. Garcia said JA Solar’s stock price decline on Wednesday was mainly in response to its reduced guidance. For 2009, the company is forecasting earnings of 90 cents per share. Analysts had been forecasting 2009 earnings of $1.56 per share.
“It would appear that the market does not have confidence in JA Solar’s ability to withstand the margin pressure,” said Mr. Garcia.
Looking ahead, Mr. Rusch said credit markets would be the key factor for the solar industry in 2009.