FAST NEWS: Daqo New Energy’s Profit Rises 11% in Third Quarter
The Latest: Polysilicon maker Daqo New Energy Corp. (DQ.US) on Thursday reported its revenue roughly doubled year-on-year to $1.2 billion in the third quarter, while its profit rose by a more modest 11% to $323 million over the period.
Looking Up: The sluggish profit growth owed largely to costs related to employee stock incentives. Excluding those, the company’s non-GAAP profit doubled to $590 million in the third quarter from $295 million a year earlier.
Take Note: The company’s polysilicon production volume fell to 33,401 metric tons (MT) for the third quarter from 35,326 MT in the second quarter as it produced at full capacity.
Digging Deeper: Daqo is one of China’s leading makers of polysilicon, a key ingredient used to make solar panels that are producing a growing volume of the world’s electricity. The company and its peers have benefited from a huge jump in polysilicon prices over the last two years, fueled by booming demand for new solar power plants. Polysilicon prices continued to rise in the third quarter, with Daqo reporting an average selling price of $36.44 per kilogram during the quarter, compared with $33.08 per kilogram in the second quarter. But prices are expected to stabilize and start coming down in the next year as Daqo and its rivals build major new capacity to tap the booming demand.
Market Reaction: Daqo’s shares fell 4.6% in Thursday trade in New York after the results were announced. Year-to-date the stock is up about 20%.
Reporting by Doug Young
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