ReneSola Ltd. (SOL) reported a third-quarter loss of 7 cents per share, worse than the Zacks Consensus Estimate of a loss of 4 cents per share. However, the company was able to increase its revenues 70.6% to $140.9 million in the reported quarter from $82.6 million in the previous quarter.
Sales in the reported quarter were boosted by higher solar product shipments, a company record of 146.9 MW, an increase of 71% from 85.9 MW in the prior quarter. In the year-ago quarter, shipments were 90.4 MW, representing shipment growth of 62.5%.
The reported quarter witnessed a huge demand for solar products, with a number of companies setting their own peak of volume sales. Last week, JA Solar Holdings Co. Ltd. (JASO) also reported a company record of 177 MW shipments during the reported quarter, showing a sequential growth of 129.9%.
The bottom line, however, has a different story to tell. Gross profit in the reported quarter was $4.7 million, compared to $4.3 million in the previous quarter and $45.8 million in the year-ago quarter. As a result, gross margin hit rock-bottom of 3.4% in the reported quarter, compared to 5.1% in the prior 2009 and 21.2% in the year-ago quarter. The sequential decrease in gross margin was a result of lower wafer average selling prices (ASP) and the residual higher cost of inventory for the quarter.
Total operating expenses were $12.5 million, an increase from $8.2 million in the foregoing quarter and $8.9 million in the year-ago quarter. The rise was mainly due to increases in general and administrative expenses and R&D expenses that were partly attributable to the integration of Wuxi Jiacheng Solar Energy Technology Company (acquired in May 2009). As a result, operating loss for the reported quarter rose to $7.8 million, compared to an operating loss of $4 million in the former quarter and operating profit of $36.9 million in the year-ago quarter.
ReneSola at the end of the reported quarter had cash and cash equivalents of $95.2 million, compared with $173.5 million after the end of the second quarter of fiscal 2009. Long-term borrowings increased to $170.7 million at the end of the first nine months of fiscal 2009 from $159.6 million at the end of the first six months of fiscal 2009.
ReneSola updated its outlook for fiscal 2009 for total solar product shipments from the range of 450 MW – 500 MW to a range of 490 MW – 520 MW. For 2010, the company expects its fiscal 2010 total solar product shipments to be in the range of 900 MW – 950 MW. The company expects to be profitable with average gross profit margin in the mid-teens for the whole of fiscal 2010.
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Read the full analyst report on “JASO”
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