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UPDATE 3-Yingli cuts margin forecast, shares fall

Published: 19 Aug 2009 17:04:10 PST

* Profit $0.06/vs before items vs $0.02/shr view

* Revenue falls 25 pct to $219.5 mln

* Gross margin forecast cut on slumping panel prices

* Shares down more than 5 percent (Adds Lazard price target cut, Simmons&Co analyst comment, background; previous NEW YORK)

LOS ANGELES, Aug 19 - Yingli Green Energy Holding Co Ltd posted a quarterly loss and cut its profit margin forecast on Wednesday due to slumping prices on solar panels, sending its shares down as much as 15 percent.

The Chinese solar energy company said its gross margin for the year would be between 18 and 20 percent, down from the 23 to 25 percent it had predicted in May. Its second-quarter gross margin was 18.3 percent.

"This reduction is not what investors were looking for," Simmons & Co analyst Burt Chao said in a note to clients.

Prices on solar panels have dropped dramatically this year as a lack of financing for renewable energy projects and a pullback in solar incentives in Spain have led to an oversupply of panels in the market.

Chinese manufacturers like Yingli have been able to boost market share by cutting their prices more aggressively than their German and U.S. peers because they have fewer long-term silicon contracts and lower electricity and labor costs.

Lazard analyst Sanjay Shrestha cut his price target on Yingli shares to $17 from $20 and cut his earnings estimates for the company for the second half of the year due to lower average selling prices on Yingli products.

Yingli's second-quarter net loss was $57.6 million, or 44 cents per American Depositary Share, compared with a profit of about $29.8 million a year earlier.

Excluding one-time charges linked to an early debt retirement, Yingli's earnings of 6 cents per share topped analysts' average forecast of 2 cents per share, according to Reuters Estimates.

Revenue fell 25 percent to $219.5 million. Analysts had been expecting revenue of $210.6 million, according to Reuters Estimates.

Yingli stuck to its forecast for full-year shipments of 450 to 500 megawatts of solar modules, an increase of as much as 78 percent from 2008.

Shares in Yingli slumped 5.4 percent to $11.11 in afternoon trade on the New York Stock Exchange. The stock hit a low of $9.97 earlier in the session.