LDK Solar: A Spark of Light

After spending most of the summer in the dark, the solar industry is seeing a ray of light after an earnings report from LDK Solar Co., Ltd. (LDK). The stock is currently up about 19% on the day and related companies such as Trina Solar Limited (TSL), and ReneSola Ltd. (SOL) are catching a bid as well. The industry-wide strength is a welcome change since declines in energy prices and disappointing news out of <st1></st1><st1>Spain</st1> sent prices lower last month.<o></o>

LDK reported revenues of $441.7 million, which is 89.2% above last quarter and an impressive 346% above the second quarter last year. Earnings were recorded at 1.29 per ADS which may be a bit misleading. The company actually had a one time profit of $60 million due to a one time sale of materials, but even if you back out this sale, the earnings were roughly 77 cents per ADS which represents a 108% gain over last year. Management pointed out that it has now signed 9 long-term supply agreements this year, which helps in diversifying the client base. The target for annualized capacity was also raised for this year (to 1.2 GW) as well as 2009 and 2010 (2.2 and 3.2 GW respectively).<o></o>