ReneSola (SOL) Posts Q3 Loss of 12c/ADS; Guides Q4 Shipments

ReneSola (NYSE: SOL) reported Q3 EPS of ($0.12), which may not compare with the analyst estimate of $0.05. Revenue for the quarter came in at $372.5 million versus the consensus estimate of $418.1 million.

Total solar module shipments were 462.2 megawatts ("MW"), compared to 498.7 MW in Q2 2014 and 462.9 MW in Q3 2013. Total solar wafer and module shipments were 663.8 MW, compared to 698.3 MW in Q2 2014 and 851.0 MW in Q3 2013.

"Our results in Q3 2014 were mainly impacted by the depreciation of the European currencies that led to a foreign exchange loss of US$13.7 million, and by a delay in shipments due to the anticipation of new lower minimum imported prices in Europe, which were announced towards the end of Q3 2014. However, our fully integrated international sales, support, and logistics platform, our global manufacturing footprint, and our focus on retail-oriented and downstream opportunities continue to keep us in an advantageously competitive position," said Mr. Xianshou Li, ReneSola's chief executive officer. "Our platform gives us the flexibility to adjust to changes in demand across all of our major markets while maintaining operating efficiency and, as in the case of the third quarter, improving our gross margin to 15.3%. Moreover, we continue to move away from low-margin markets and to direct more of our resources toward higher-margin commercial and residential projects and total-solution opportunities.

"While we remain focused on our retail and residential-oriented business development, we selectively pursue downstream project opportunities with high quality and low risk in developed countries such as the United Kingdom. As of November 2014, we have started construction on a second downstream project in the UK and are also in the process of conducting due diligence on other quality projects there, which we expect to sell and generate revenue from in the coming quarters."

Mr. Daniel K. Lee, ReneSola's chief financial officer, said, "While we focus on expanding our commercial, retail and downstream initiatives, we continue to follow a prudent financial approach and asset-light strategy in order to grow our margins while improving our cash flow. Our Q3 gross margin of 15.3% represents two straight quarters of margin improvement. Furthermore, our cash flow from operations improved from an outflow of US$40.6 million in 2Q14 to an outflow of US$10.7 million, of which almost US$10 million was payment used for our downstream projects in the UK."

Outlook

For Q4 2014, the Company expects its total solar module shipments to be in the range of 460 MW to 480 MW, and its gross margin to be approximately 13%.

For earnings history and earnings-related data on ReneSola (SOL) click here.

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