(Reuters) - China-based JA Solar Holdings Co Ltd's (JASO.O) muted forecast gave little hope of ending a string of quarterly losses, as it struggles to reduce its dependence on Europe.
JA Solar's shares were down 3.8 percent at $7.66 in morning trade, while the stocks of most other solar companies were up.
Chinese solar producers, including JA Solar, hiked sales to Europe in the second quarter ended June 30 ahead of restrictions on Chinese exports, but sales have eased in the current quarter.
However, JA Solar's dependence on Europe led it forecast shipment being flat in the current quarter, while other companies forecast a rise as they moved to regions such as Japan where they are assured of higher margins.
"We're not going to be seeing any notable profitability improvement in the second half (at JA Solar)," said Jim Fontanelli, an analyst at Arete Research.
After two years of rock-bottom prices and dismal sales, most solar companies pointed better results this quarter onwards as the prices of modules stabilized and production costs fell.
JinkoSolar Holding Co Ltd (JKS.N) swung to a profit after seven quarters of loss. Canadian Solar (CSIQ.O) expects to post a full-year profit, while Trina Solar Ltd TSL.N also aims to turn profitable this year.
JA Solar said it expects to ship 450 megawatt (MW) to 470 MW of solar products in the third quarter. Shipments rose 11 percent to 463.7 MW in the second quarter.
Gross margin rose to 8.1 percent, from 4.8 percent. However its costs rose about 18 percent in the quarter, compared with a 22 percent fall at JinkoSolar, which helped it post a profit.
"It does not look like we are going to see any kind of gross margin improvements (at JA Solar) in the third quarter," said Fontanelli.
The company's net loss narrowed to $21.6 million, or 58 cents per American depositary share (ADS) in the second quarter, from $72.1 million, or $1.91 per ADS, a year earlier.
Revenue fell 12 percent to $258.1 million.
JA Solar is also looking to expand into the business of building solar power plants to make up for loss of market share in Europe, traditionally its largest.
Analysts however, are skeptical of the strategy as most of the company's project development is in China, where prices for solar products are among the lowest in the world.
Reporting Kanika Sikka and Garima Goel in Bangalore; Editing by Savio D'Souza