Daqo New Energy stock slips 4% as Q2 results disappoint

SHANGHAI - Daqo New Energy Corp. (NYSE:DQ ) shares fell 4.9% after the polysilicon manufacturer reported second quarter results that missed analyst expectations, as the solar industry faced significant challenges.

The company reported a loss of $1.50 per American Depositary Share (ADS) in Q2, compared to analyst estimates of a $0.54 loss per ADS. Revenue came in at $219.9 million, well below the consensus estimate of $337.13 million.

Daqo's results were impacted by a sharp decline in polysilicon prices during the quarter. The average selling price dropped to $5.12/kg in Q2, down from $7.66/kg in Q1. This led to a gross loss of $159.2 million, compared to a gross profit of $72.1 million in the previous quarter.

"The solar industry experienced significant challenges during the second quarter, as market prices fell across the solar value chain to below production costs for nearly the entire industry," said CEO Xiang Xu.

The company recorded a $108 million inventory impairment expense as market values fell below book values. However, Daqo maintained a strong balance sheet with $997 million in cash and no financial debt at quarter-end.

Looking ahead, Daqo lowered its full year 2024 production volume guidance to 210,000-220,000 metric tons, down from previous expectations, citing current market conditions.

Despite near-term headwinds, management remains optimistic about the long-term growth prospects for solar energy.

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Source: Investing.com