This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Dark Clouds Gather as LDK Readies Earnings Report

NEW YORK ( TheStreet) -- LDK Solar (LDK) has so many storm systems overhead it's hard to know which one to fear the most.

I'm not an enthusiastic believer in solar as an investment and for good reason. Almost everyone who has tried their luck in the solar space watched their investment evaporate into thin air.

LDK Chart LDK data by YCharts

LDK Solar is a manufacturer of multicrystalline solar wafers, which are the principal raw material used to produce solar cells. LDK's headquarters and manufacturing facilities are in China and the company's office in the United States is located in Sunnyvale, Cal.

LDK's biggest obstacle is turning a profit from production. Once again, Wall Street is looking for a significant earnings loss to be reported before the market opens Tuesday. Analysts expect LDK to lose 96 cents a share, an improvement over the $1.46 lost in the corresponding period a year ago.

After reviewing LDK's balance sheet and cash burn rate, the $1.39 current share price may be generous. LDK is more or less broke from a realistic financial picture. At the close of 2012, the company held about $265 million in cash and short-term investments. After adding in inventory and subtracting for the near-term liabilities, the balance sheet turns upside down quickly.

LDK depends on European sales, and if you've turned on the news lately you know the popping of Champaign corks has slowed over the last four years without an end in sight. Germany, arguably the strongest member of the European Union, cut solar subsidies, as did other member nations.

The loss of the subsidies cast storm clouds over solar that haven't dissipated. In fact, Chinese solar companies are right in the cross-hairs of European trade negotiators. Europe may increase import duties for solar panels from 37% to 68%, depending on the firm.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
LDK $0.00 0.00%
AAPL $93.74 -1.15%
FB $117.58 0.73%
GOOG $693.01 0.29%
TSLA $240.76 -2.81%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs