UPDATE 1-LDK Solar reports ninth quarterly loss, cash levels plummet
* Q2 cash, cash equivalents $85.1 mln, vs $174.1 mln in Q1
* 2nd-quarter loss $0.97/ADS vs $2/ADS year ago
* Sees early signs of improvement in solar market
* Sees 3rd-quarter revenue, shipments higher than 2nd-quarter
Aug 27 (Reuters) - China's LDK Solar Co Ltd reported its ninth straight quarterly loss and the debt-laden company's cash levels dwindled to the lowest level in nearly four years.
Chinese solar companies piled on debt over the past two years to expand output, eventually leading to a glut that sent prices of solar products tumbling.
LDK, the most indebted solar products maker, however joined its rivals in saying it was starting to see early signs of improvement. It expects third-quarter revenue to be higher than that in the second quarter.
Analysts have long warned that LDK would very likely have to seek bankruptcy protection, but for support from the Chinese government, as its debt levels far exceed the cash flows it is capable of generating.
"LDK's balance sheet makes it a 'zombie company.' It only survives due to continued bailouts from local or provincial authorities," said Raymond James analyst Pavel Molchanov.
LDK's cash and cash equivalents more than halved to $85.1 million in the second quarter ended June 30.
The company, which primarily makes solar wafers used to build solar cells and panels, had total debt of $2.65 billion as of March 31, according to Thomson Reuters data.
The Chinese lenders of Suntech Power Holdings Co Ltd dragged its main unit into insolvency proceedings in March after it defaulted on $541 million in bonds.
LDK's gross margin slid to negative 46.9 percent in the second quarter, in contrast to the positive gross margins reported by its rivals Canadian Solar Inc, Trina Solar Ltd and JinkoSolar Holding Co Ltd.
JinkoSolar even swung to a profit in the second quarter after seven quarters of loss.
However, the faint signs of an improving solar market, helped LDK forecast revenue, wafer and cell shipments rising in the third quarter compared with the second quarter.
It expects revenue to rise to $140 million to $180 million in the current quarter, from $114.7 million in the second quarter.
Most of the increase is likely come from higher wafer shipments, which is expected to be between 350 megawatts (MW) and 450 MW, higher than 303.9 MW in the second quarter.
Cell and module shipments are expected to shoot up to between 60 MW and 80 MW in the third quarter, from 35.3 MW.
The company's net loss narrowed to $165.3 million, or 97 cents per American Depositary Share (ADS) in the second quarter, from $254.3 million, or $2 per ADS, a year ago.
A sharp cut in manufacturing costs contributed to the smaller loss. LDK has laid off nearly 15,000 people in the past year and had 8,168 employees as of March 31.
Shares of the company closed at $1.74 Monday on the New York Stock Exchange.