Daqo New Energy (NYSE: DQ) reported Q3 EPS of $0.33, versus $2.42 reported last year. Revenue for the quarter came in at $67.4 million versus the consensus estimate of $74.5 million.

• Solar wafer sales volume of 8.7 million pieces in Q3 2018, compared to 9.8 million pieces in Q2 2018
• Revenue from continuing operations of $67.4 million in Q3 2018, compared to $63.0 million in Q2 2018
• Gross profit from continuing operations of $12.8 million in Q3 2018, compared to $25.2 million in Q2 2018. Gross margin from continuing operations was 19.1% in Q3 2018, compared to 40.1% in Q2 2018
• EBITDA (non-GAAP)(3) from continuing operations of $14.8 million in Q3 2018, compared to $27.4 million in Q2 2018
• EBITDA margin (non-GAAP)(3) from continuing operations of 22.0% in Q3 2018, compared to 43.6% in Q2 2018
• Net income from continuing operations was $4.2 million in Q3 2018, compared to $10.9 million in Q2 2018 and $14.6 million in Q3 2017.
• Net loss from discontinued operations was $22.4 million in Q3 2018, compared to net income from discontinued operations of $2.7 million in Q2 2018 and $9.7 million in Q3 2017
• Net loss attributable to Daqo New Energy shareholders of $18.3 million in Q3 2018, compared to net income attributable to Daqo New Energy shareholders of $13.4 million in Q2 2018 and $24.1 million in Q3 2017
• Loss per basic American Depository Share (ADS) of $1.39 in Q3 2018, compared to earnings per basic ADS of $1.06 in Q2 2018, and $2.28 in Q3 2017
• Adjusted net income (non-GAAP)(3) attributable to Daqo New Energy shareholders of $4.3 million in Q3 2018, compared to $18.2 million in Q2 2018 and $25.6 million in Q3 2017
• Adjusted earnings per basic ADS (non-GAAP)(3) of $0.33 in Q3 2018, compared to $1.44 in Q2 2018, and $2.42 in Q3 2017

Mr. Longgen Zhang, CEO of Daqo New Energy, commented, "We are pleased to report another solid quarter. In spite of weak market demands, we sold 6,199 MT of polysilicon during the third quarter, with polysilicon inventory returning to lean levels, which demonstrates our product's superior quality and our strong relationships with downstream customers. We successfully completed annual maintenance in September and resumed production earlier than originally scheduled to minimize its impact on production volumes and our cost structure. In addition, we also began pilot production for Phase 3B project in October ahead of schedule. We are in the process of optimizing throughput, efficiency and quality and expect to ramp up Phase 3B to full capacity early in the first quarter of 2019. With lower electricity rates, higher manufacturing efficiency, greater economies of scale and enhanced equipment and processes, we expect the overall total cost of polysilicon production from our Xinjiang facilities to decrease to approximately US$7.50 per kilogram when fully ramped up. Moreover, Phase 3B will not only increase our capacity and reduce costs, but also allow us to improve product quality with approximately 80% of our production capacity devoted to mono-crystalline grade polysilicon, of which approximately half will be applicable for use in N-type mono-crystalline solar cells."

"Despite the impact of the new solar PV policy issued on May 31, 2018, China will still be the largest solar PV market this year with 34.5 GW already installed during the first three quarters of 2018. In late September, China\'s National Development and Reform Commission released the second draft of renewable energy portfolio standard, which is expected to lay a solid foundation for the nation's goals of increasing non-fossil energies as percentage of total primary energy to 15% in 2020 and 20% in 2030, respectively. In addition, China National Energy Administration held an informal gathering on November 2, in which it reiterated the government's continuous support to the solar PV industry and hinted that it might increase China\'s cumulative solar installation target by 2020 to at least 210 GW or higher. Subsidies will also continue until 2022 when grid parity is expected to be achieved. Several government agencies have also started to evaluate potential opportunities to effectively reduce the soft cost of solar PV projects so that an increasing number of grid-parity projects will become feasible in China as soon as possible. Solar PV is becoming one of the most cost-effective and feasible forms of renewable energy generation in many global markets, including China. With cost reduction efforts continuing throughout the entire solar PV value chain, we believe the new era of grid parity in the global solar PV market is just around the corner."

"As one of the industry's leading suppliers, Daqo New Energy benefits from its strong cost structure advantage and quality, which are continuously being improved upon with the addition of our Phase 3B and 4A projects. Our Phase 4A project is currently under construction and is expected to begin pilot production in the fourth quarter of 2019. We expect to ramp up Phase 4A to full production in the first quarter of 2020 which will expand our total production capacity to 70,000 MT and reduce the overall total cost of polysilicon production for our Xinjiang facilities to approximately US$6.80 per kilogram. We believe the combination of our cost structure advantage, high quality products and increasing capacity will allow us to benefit from future sustainable growth of global solar PV markets."

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