LDK Cuts 1/4 of its Workforce
Solar Struggles Continue
The solar power industry is supposed to be a huge job creator. When companies and countries move away from fossil fuels, renewables like solar can grow.
But that has not been the case for solar cell wafer-maker LDK Solar Co. (NYSE: LDK), based in China.
LDK cut 22% of its workforce in 2011, mostly from July on, when it laid off 5,554 workers.
Since solar prices have plunged so much in the past year, LDK is not alone.
Many companies, like major U.S. solar company First Solar (NASDAQ: FSLR) have been struggling too. First Solar will cut 30% of its staff soon.
LDK’s CEO Xiaofeng Peng thinks this sort of competition is going to continue:
“The solar industry experienced a tremendous supply and demand imbalance throughout the value chain during the fourth quarter. In 2012, we expect that excess capacity and further policy uncertainties in Europe and the U.S. will result in continued intense competition within the solar industry.”
Analyst Hari Chandra Polavarapu from Auriga USA cut LDK shares on Tuesday from Hold to Sell, saying:
“We are not hopeful about LDK Solar, or its business fundamentals, as its focus on scale to the exclusion of all else has trapped it in a $3.35 billion debt morass.”
And on Monday, it showed a loss of $588.7 million in the fourth quarter of 2011. Without the job cuts, it would’ve hurt even more.
The company’s earnings fell 4.5% on Wednesday to $2.95. It’s fourth quarter earnings were some of the most depressing in the solar industry on the Bloomberg Large Solar Index.
Still struggling in 2012, LDK expects revenue of $190 to $230 million for the first quarter, well below analyst estimates of $420.9. The quarter ended in March, and numbers should be available soon.
That’s all for now,