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Yingli Green Energy Q3 Loss Sharply Widens, Backs 2012 Shipment Outlook

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Chinese solar energy company Yingli Green Energy Holding Co. Ltd. (YGE) reported Wednesday a sharply wider loss for the third quarter compared to last year, hurt by a hefty non-cash inventory provision and a depreciation expense related to underutilized capacity.

Adjusted loss per share was narrower than analysts' expectations, and quarterly revenues topped their estimates by a whisker. However, the company maintained its PV module shipment guidance for the full-year 2012.

"We are pleased to see that demand in China has grown rapidly starting in the third quarter as project construction in all segments accelerated. Consequently, our revenues from China increased from 14% in the second quarter to 28% of total net revenues in the third quarter," Chairman and CEO Liansheng Miao said.

The company noted that the demand slowdown in Germany due to tariff cuts at the end of the second quarter resulted a 16.9 percent sequential decline in total module shipment in the recent quarter.

The Baoding, China-based photovoltaic products manufacturer reported a net loss of RMB 959.22 million or $152.63 million for the third quarter, sharply wider than RMB 180.45 million in the prior-year quarter. Loss per share and per American depositary share or ADS, were RMB 6.13 or $0.98, sharply wider than RMB 1.14 last year.

Results for the latest quarter primarily include a non-cash inventory provision of RMB 523 million or $83 million, while the year-ago quarter included RMB 258.6 million of the same provision.

Excluding non-cash charges, adjusted net income for the quarter was RMB 398.34 million or $63.38 million, compared to adjusted loss of RMB 142.66 million in the year-ago quarter. Adjusted loss per share and per ADS was RMB 2.54 or $0.40, compared to loss per share or per ADS of RMB 0.89 last year.

On average, 13 analysts polled by Thomson Reuters expected the company to report a loss of $0.63 per share for the quarter. Analysts' estimates typically exclude special items.

Total net revenues for the quarter nearly halved to RMB 2.24 billion or $355.94 million, from RMB 4.26 billion in the same quarter last year. Thirteen Wall Street analysts had a consensus revenue estimate of $353.23 million for the quarter.

The company noted that quarterly shipment of PV modules decreased 16.9 percent sequentially from the second quarter.

The latest quarter reflected a foreign currency exchange gain of RMB 52.1 million or $8.3 million, compared to a foreign currency exchange loss of RMB 153.2 million in the year-ago quarter, primarily attributable to the appreciation of the Euro and the U.S. dollar against the Renminbi.

"In the fourth quarter, we continue to see stable demand from Europe and the U.S. and rising shipments to rapidly growing markets like China. Despite the trade cases in the U.S. and Europe, we will continue to provide our high quality products and services to our loyal customers in these markets," Miao noted.

Looking ahead to fiscal 2012, the company reaffirmed its PV module shipment guidance in the range of 2100 to 2200 megawatts or MW, based on current market and operating conditions, estimated production capacity and projected customer demand.

YGE closed Tuesday's regular trading session at $1.43, up $0.08 on a volume of 1.06 million shares, higher than the three-month average volume of 0.93 million shares. In the past 52-week period, the stock has been trading in a range of $1.25 to $6.27.

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