Shares of Chinese solar energy technology provider Yingli Green Energy (YGE) are down 35 cents, or over 7%, at $4.46 after the company this afternoon cut its outlook for photovoltaic module production for the Q4 ended in December, and slashed its gross margin expectation.
For the December quarter, the company’s shipment of modules declined in volume by almost 30% from the September quarter’s level, higher than the company’s prior expectation for a drop in the “low to middle twenties,” on a percent basis.
The company still expects to ship volume of 1.58 megawatts to 1.63 megawatts worth of modules in total for the full year.
Gross margin probably came in at 3% in Q4, the company said, down from a prior expectation for 10% gross margin.
Gross margin is being affected by non-cash inventory provision, on account of the continued fall in polysilicon prices, the company said, and Yingli’s own in-house polysilicon operations took a charge for asset impairment:
Due to the challenging solar market conditions and the significant reduction of the Company�s market capitalization since the second quarter of 2011, the Company expects to recognize an impairment of long-lived assets of�Fine Silicon Co., Ltd., or Fine Silicon, the Company�s in-house polysilicon production subsidiary, of approximately�US$361 million and an impairment of goodwill of approximately�US$43 million for the fourth quarter and full year 2011. [...] The Company further expects to provide a provision of approximately�US$135 million on its inventory purchase commitment under long-term polysilicon supply contracts as a result of continuing decline in the polysilicon purchase price.
Yingli expects to report full results on February 29th, before the bell.
Fin.
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