Trina Solar Limited (ADR) (TSL), LDK Solar Co., Ltd (ADR) (LDK): JA Solar Holdings Co., Ltd. (ADR) (JASO) Earnings Should Look a Little Less Ugly

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JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) will release its quarterly report on Thursday, and despite some encouraging news in recent months that has sent the stock higher, the company is expected to lose a substantial amount of money for the foreseeable future. Will the JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) earnings report make investors feel more comfortable about the future of the Chinese solar industry or merely reinforce long-held concerns about overcapacity from too many competitors?

JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO)

Judging from the stock’s roller-coaster performance over the past quarter, investors aren’t sure what to believe about JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO)’s future. Yet with so many of its peers already having reported their earnings, we can get some hints as to what trends are likely to drive the company’s financial results this quarter as well as its future prospects. Let’s take an early look at what’s been happening with JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) over the past quarter and what we’re likely to see in its report.

Stats on JA Solar

Analyst EPS Estimate ($0.54)
Year-Ago EPS ($1.85)
Revenue Estimate $250.42 million
Change From Year-Ago Revenue (11.9%)
Earnings Beats in Past Four Quarters 1

Source: Yahoo! Finance.

What’s up with JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO) earnings?
In recent months, analysts have gotten quite a bit more optimistic about JA Solar Holdings Co., Ltd. (ADR) (NASDAQ:JASO)’s long-term prospects. They’ve held steady on their June-quarter estimates, but they’ve narrowed their full-year 2013 loss projections almost by half and also trimmed their expectations for 2014’s loss as well. The stock has been up and down but eked out a 5% gain since late May.

JA Solar started the quarter off well, reporting a first-quarter earnings surprise that sent the stock soaring 70% in a single day. Even though the company reported a net loss, it was less than most had expected to see. JA Solar was also able to pay off nearly $120 million in convertible debt in May, avoiding the defaults that rivals Suntech and LDK Solar Co., Ltd (ADR) (NYSE:LDK) had earlier this year.

Yet what really moved solar stocks in both directions during the quarter was the looming trade war between China and Europe. In June, JA Solar and its peers took big hits as Europe imposed an 11.8% tariff on Chinese solar products, with threats to boost the tariff to between three and six times that level by this month. In the end, though, Europe and China agreed to a price floor for solar modules, avoiding the larger tariff and putting an end to the dispute at least in the short run.

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