ReneSola Ltd. (SOL) reported a fourth-quarter loss of 23 cents per share, worse than the Zacks Consensus Estimate of a loss of 8 cents. However, fiscal 2009 loss of 86 cents was in line with fiscal 2008 results.
Operational Results
ReneSola in the reported quarter shipped 202.9 MW of solar products, an increase of 38.1% from 146.9 MW in the third quarter of fiscal 2009. Solar wafer and module shipments were 187.4 MW and 14.6 MW, respectively, representing increases of 39.5% and 35.2%, respectively, from the third quarter of fiscal 2009.
As a result, revenues rose to $179.9 million, increasing by 27.7% from $140.9 million in the third quarter of fiscal 2009. The uptrend was also reflected in fiscal 2009 solar product shipments of 526.6 MW, increasing by 50.4% from 350.1 MW in fiscal 2008. However, revenue in fiscal 2009 was $510.4 million compared to $670.4 million in fiscal 2008.
ReneSola reported a gross profit of $4.9 million with a margin of 2.7% in the quarter. Total operating expenses were $25.3 million, an increase from $13.0 million in the year-ago quarter. The increase was primarily attributable to a provision of $14.6 million against doubtful receivables.
Operating loss was $20.5 million, with a negative margin of 11.4%. Operating loss for fiscal 2009 was $90.6 million, compared to $48.5 million in fiscal 2008. Adjusted operating loss for fiscal 2009 was $4.7 million excluding inventory write-downs and the provision for doubtful receivables. Operating margin for fiscal 2009 was negative 17.7%, compared to negative 7.2% in fiscal 2008.
Financial Condition
ReneSola at fiscal-end 2009 had cash and cash equivalents of $106.8 million, compared with $112.3 million at fiscal-end 2008. Long-term borrowings increased to $203.9 million at fiscal-end 2009 from $32.8 million at fiscal-end 2008. The company used $53.8 million cash for operating activities in fiscal 2009, compared to $34.8 million cash used in fiscal 2008.
Guidance and Estimate Revisions Trend
ReneSola in the current quarter expects total solar product shipments in the range of 215 MW – 230 MW. This is expected to bring in revenues in the range of $195 million –$205 million while gross profit margin is expected to be in the range of 16% – 18%. The Zacks Consensus EPS Estimate is currently at 5 cents for the quarter.
ReneSola however expects solar wafer price declines in the range of 10% to 15% in the second half of fiscal 2010 due to increased competition and feed-in tariff cuts in international markets such as, Germany. The company maintains its fiscal 2010 solar product shipment guidance in the range of 900 MW – 950 MW.
The company expects an average gross profit margin in the range of 17% – 20% for fiscal 2010. The Zacks Consensus EPS Estimate is currently at 51 cents for the fiscal.
ReneSola has witnessed a consistent negative streak in earnings surprises over the past four quarters. The average is a negative at 151.04%, reflecting the volatility in the solar segment.


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