Before markets opened today,
) reported first quarter 2012 results. In the reported quarter, the
company clocked adjusted loss per American Depositary Share (ADS)
of 47 cents per share, missing the Zacks Consensus Estimate of 30
cents of loss per ADS. Numbers, however, were way behind than the
year-ago quarterly earnings of 49 cents per share.
In the reported quarter, ReneSola's revenues of $211.5 million
plummeted 41.1% from $359.2 million in the year-ago quarter and
rose 12.7% from $187.7 million in the sequentially preceding
Revenues increased quarter over quarter, with a decrease in the
average selling price ("ASP") of solar wafers and modules to 33
cents per watt and 84 cents per watt, respectively, offset by an
increase in solar wafer shipments. Revenue in the reported quarter,
however, comfortably beat the Zacks Consensus Estimate of $187
In the reported quarter, ReneSola's product shipments were 466.0
MW versus 339.9 MW in the fourth quarter of 2011 and 330.4 MW in
the year-ago quarter. In the reported quarter, solar wafer and
module shipments were 375.1 MW and 90.9 MW, respectively.
The sequential increase in solar product shipments was the
result of strong demand from European markets, particularly
ReneSola digested a gross loss of $8.0 million compared with
$43.4 million of gross loss in the fourth quarter of 2011 and
$101.2 million of gross profit in the year-ago quarter. The
sequential decrease in gross loss was primarily due to lower costs
and improved margins on the company's solar products. This was
partially offset by an inventory write-down of $12.2 million,
primarily as a result of the decline in the price of
Overall, ReneSola recorded a net loss of $40.2 million compared
with a net income of $43.3 million in the year-ago quarter.
As of March 31, 2012, ReneSola had cash and cash equivalents
plus restricted cash of $388.3 million, compared with $437.4
million at the end of the fourth quarter of 2011. Total debt was
$800.8 million, compared with $715.6 million at the end of the
fourth quarter of 2011.
Short-term borrowings were $662.6 million, an increase from
$570.9 million at fiscal-end 2011. Capital expenditures were $45.0
million in the reported quarter.
ReneSola, for the second quarter of 2012, expects total solar
wafer and module shipments to be in the range of 460 MW-480 MW. Of
this, module shipments are expected to be in the range150 MW-170
MW. Revenue for the second quarter is expected to be in the range
of $200 million-$220 million with positive gross margins.
For the full year 2012, the company's outlook is unchanged, with
total solar wafer and module shipments expected to be in the range
of 1.8 GW-2.0 GW.
Based out of China, ReneSola is a leading global manufacturer of
solar wafers and producer of solar power products. Capitalizing on
proprietary technologies, economies of scale, high production
quality, and technological innovations and know-how, ReneSola
leverages its in-house virgin polysilicon and solar cell and module
production capabilities to provide its customers with solar wafer
products and processing services. The company possesses a global
network of suppliers and customers.
ReneSola plans to increase its module production capacity to 1.2
GW for modules by the end of the second quarter of 2012. In the
reported quarter the company's total module manufacturing cost was
approximately 74 cents per watt. The company expects total module
processing cost to decrease to below 70 cents per watt for the
ReneSola is now producing high-efficiency Virtus wafers with a
conversion efficiency of 18.2%. The company's blended non-silicon
wafer processing cost was 19 cents per watt in the reported
quarter, a decrease from 20 cents per watt sequentially.
Going forward, the successful execution of the company's
cost-reduction strategies should allow the company to reduce its
blended non-silicon wafer processing cost to 17 cents per watt by
the end of the ongoing quarter and to 15 cents per watt by the end
of fiscal 2012.
However, ReneSola's fortunes have been impacted by the
industry-wide oversupply glut leading to sharply falling Average
Selling Prices, tepid module demand in Europe, and rising
competition in the market. Given the industry-wide high inventory
level, we advise investors not to take any position in the
short-term Zacks #5 Rank (Strong Sell) stock ReneSola. Over the
longer run we maintain our Neutral recommendation on the stock.
In the near term we would advise investors to focus on its Zacks
#2 Rank (Buy) peer
Ascent Solar Technologies Inc.
ASCENT SOLAR TE (ASTI): Free Stock Analysis
RENESOLA LT-ADR (SOL): Free Stock Analysis
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