ReneSola Ltd. SOL reported adjusted loss of 7 cents per American Depositary Share (“ADS”) in the first quarter of 2015, widely missing the Zacks Consensus Estimate of a loss of 5 cents by 40%.
The company has shifted its focus from the low-margin wafer business to high-margin module business but witnessed lower average selling price (“ASP”) of modules. Results were also impacted by a foreign exchange loss of $16.1 million due to the depreciation of European currencies and the yen against the U.S. dollar.
Investors reacted negatively to the wider-than-expected loss, resulting in shares losing 7.7% in two days’ trading session to close at $1.32 on Jun 3, 2015.
Revenues
ReneSola’s net revenue of $349 million missed the Zacks Consensus Estimate of $362 million by 3.6%. Reported revenues also declined 15.9% from $415 million in the prior-year quarter and 9.8% from $387 million in the preceding quarter. The decrease was due to the negative impact of lower ASP of modules and wafer shipments in the reported quarter.
Shipments
In the quarter under review, total solar wafer and module shipments were 691.5 megawatts (“MW”), down 2.6% year over year and 7.1% sequentially. Module shipments were 496.4 MW, down 4.7% year over year but up 1.6% sequentially. Wafer shipments stood at 195.1 MW, up 3.2% year over year but down 23.8% sequentially.
The geographic breakdown of module shipments in the first-quarter are as follows: Europe represented 44.4% of ReneSola’s total shipments, Japan 30.4%, China 4.8% and the U.S. 3.3%, while the rest of the world accounted for 17.1%. A significant increase in shipments to the UK drove contribution from the European market, while the company’s shift toward high-margin markets resulted in poor shipments to the U.S. and China.
Operational Highlights
Gross margin of 10.5% for the quarter remained nearly unchanged from the year-ago figure but dropped from 13.2% in the fourth-quarter of 2014 primarily due to lower ASP of modules and delay in revenue generation from a UK-based project, which had been awaiting final certifications.
Operating expenses decreased 12.5% year over year and 13.5% sequentially to $46.2 million primarily due to lower sales, general and administrative (“SG&A”) expenses.
Operating loss during the quarter was $9.5 million, comparing unfavorably with a loss of $8.7 million in the year-ago period and $2.2 million in fourth-quarter 2014.
Financial Condition
As of Mar 31, 2015, ReneSola had cash and cash equivalents plus restricted cash of $228.1 million, compared with $214.9 million as of Mar 31, 2014.
Net cash outflow from operating activities was $9 million in first-quarter 2015 compared to an outflow of $112.3 million in the year-ago quarter.
Long-term debt was $723 million at the end of first-quarter 2015 compared with $723.9 million as of Mar 31, 2014.
Guidance
The company expects second-quarter 2015 revenues in the range of $250 million to $300 million and gross margin in the range of 16% to 18%.
Peer Releases
Canadian Solar Inc. CSIQ reported first-quarter earnings of $1.04 per share, comfortably beating the Zacks Consensus Estimate of 75 cents by 38.7%.
Trina Solar Ltd TSL reported first-quarter earnings of 13 cents per share, beating the Zacks Consensus Estimate of 9 cents by 44.4%.
JinkoSolar Holding Co. JKS reported first-quarter earnings of 88 cents per share, comfortably beating the Zacks Consensus Estimate of 46 cents by 91.3%.
Zacks Rank
ReneSola presently carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment