ReneSola Turns To Profit In Q2, Beats View; But Revenues Miss

(RTTNews) - China-based solar photovoltaic products maker ReneSola Ltd. (SOL) on Tuesday reported a turnaround to profit in the second quarter from last year, reflecting higher revenues and margins.

Earnings per share for the quarter beat analysts' expectations, while revenues missed their estimates. Looking ahead, the company projects total solar module shipments for the third quarter to increase on a sequential basis.

Xianshou Li, chief executive officer of ReneSola said, "We are proud to report that ReneSola recorded a profitable second quarter with a gross margin of 14.7%, beating consensus and our guidance. Our quarterly results stemmed from fundamental improvements to our business operations as well as a differentiated and competitive global-centric business model, which we expect will lead to stronger results for the rest of this year."

ReneSola's net income for the second quarter was $0.8 million or breakeven per share, compared to net loss of $21.1 million or $0.12 per share in the same period last year.

Earnings per American depositary share or ADS for the quarter was $0.01, compared to loss per ADS of $0.24 in the year-ago period. On average, analysts polled by Thomson Reuters expected the company to report loss of $0.10 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenues for the quarter grew 3 percent to $387.1 million from $377.4 million in the year-ago period. Analysts had a consensus revenue estimate for the quarter of $401.43 million.

Gross margin for the quarter expanded to 14.7 percent from 8.0 percent in the year-ago period. Operating margin was 2.7 percent compared to negative 4.4 percent in the prior-year quarter.

The company said its cost-reduction efforts were successful in both its internal domestic and international OEM operations, aided by its fully-operational, in-house polysilicon production capabilities and a more efficient process control. The company added that going forward, it will make efforts to further reduce its production cost and to improve profitability.

Total solar module shipments in the quarter were 498.7 megawatts or MW, up 15 percent from 434.1 MW in the year-ago quarter, and within the company's guidance of 480 MW to 500 MW.

However, total solar wafer and module shipments in the quarter declined 18 percent to 698.3 MW from 849.3 MW in the same period last year. The company noted that wafer shipments declined in the quarter from last year, due to a strategic business decision to use the majority of the company's wafer for internal module production.

Looking ahead to the third quarter, ReneSola projects total solar module shipments in a range of 530 MW to 550 MW, and gross margin of 15 percent to 17 percent.

The company said that with the overall stability in polysilicon prices, and production cost reductions resulting from seasonally lower electricity prices, it expects to continue to benefit from its in-house polysilicon production capabilities in the third quarter.

Xianshou Li said, "The current international business environment for Chinese solar manufacturers is becoming more challenging, with an increasing number of trade cases in different regions around the world. However, having positioned ourselves as a global player, we are able to leverage our differentiated business model..."

SOL is trading at $2.78, down $0.06 or 2.07 percent on a volume of 1.18 million shares.