SHANGHAI - Daqo New Energy Corp. (NYSE: NYSE:DQ), a leading manufacturer of high-purity polysilicon for the global solar PV industry, reported an earnings beat for the fourth quarter of 2023, with adjusted earnings per share (EPS) of $0.94, surpassing analyst expectations by $0.10.
Following the announcement, the stock was up 1.59% Wednesday morning.
However, the company's revenue for the quarter was $477.1 million, falling short of the consensus estimate of $529.4 million. Despite the revenue miss, the stock price rose by 3.54%, indicating a positive investor response to the earnings report.
The company's fourth-quarter revenue marked a significant decrease from the $864.3 million reported in the same period last year, reflecting the challenges faced by the solar industry with declining polysilicon prices.
The gross margin for the quarter improved to 18.3% from 14.0% in the previous quarter, but was sharply down from the 77.4% gross margin in the fourth quarter of 2022. The company attributed the margin improvement to higher average selling prices (ASP) and lower production costs.
Daqo New Energy's net income attributable to shareholders was $44.9 million for the quarter, a turnaround from a net loss of $6.3 million in the third quarter of 2023 and a decrease from $332.7 million in the fourth quarter of the previous year. The company's EBITDA for the quarter was $128.2 million, with an EBITDA margin of 26.9%, reflecting an improvement from the third quarter but a decline from the same quarter last year.
Looking ahead, Daqo New Energy provided guidance for the first quarter of 2024, expecting to produce approximately 60,000MT to 62,000MT of polysilicon. For the full year of 2024, the company anticipates a production volume of 280,000MT to 300,000MT. This guidance suggests a significant increase in production volume compared to 2023, signaling the company's optimism about the future despite the recent market challenges.
Mr. Xiang Xu, Chairman and CEO of Daqo New Energy, commented on the results, noting the company's resilience in the face of a difficult year for the solar industry. "We maintained profitability despite the challenging market conditions, generating $128 million in EBITDA for Q4, and maintained a strong cash flow," he said. Xu also highlighted the company's strategic focus on increasing the proportion of high-efficiency N-type polysilicon in its product mix and reducing production costs through digital transformation and AI-powered analytics.
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