| ReneSola (SOL) Posts Wider Q4 Loss, Expects Lower '15 Shipments - Analyst Blog | |
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ReneSola Ltd SOL reported adjusted loss per American Depositary Share (ADS) of 15 cents in the fourth quarter of 2014, in line with the Zacks Consensus Estimate. The reported loss was much wider than the year-ago loss of 3 cents per ADS and from a loss of 1 cent per ADS in the preceding quarter.
The lackluster performance was mainly due to lower shipments during the quarter. Results were particularly impacted by a foreign exchange loss of $13.5 million due to the depreciation of European currencies and the yen against the U.S. dollar.
Revenues
ReneSola’s net revenues of $387 million declined 11.8% from $438.8 million in the prior-year quarter. Yet, net revenues rose 3.9% from $372.5 million in the preceding quarter. The reported figure surpassed the Zacks Consensus Estimate of $364 million by 6.3%.
The year-over-year decline in sales was mainly due to lower shipment volume.
Shipments
During the quarter under review, total solar wafer and module shipments were 744.3 megawatt (MW), down 5.1% year over year but up 12.1% sequentially. Module shipments were 488.4 MW, down 3.3% year over year but up 5.7% sequentially. Wafer shipments stood at 255.9 MW, down 8.2% year over year but up 26.9% sequentially.
The geographic breakdown of module shipments in the fourth quarter was as follows: Europe represented 30.5% of ReneSola’s total shipments, Japan 26.8%, China 7.7%, U.S. 13.9%, and the rest of the world 21.1%. The company registered lower average selling prices (ASPs) for its modules.
Operational Highlights
Gross margin for the quarter expanded to 13.2% from 11.3% in the year-ago period but dropped from 15.3% in the third quarter of 2014.
Operating expenses increased 30.6% year over year and 9.9% sequentially to $53.4 million during the quarter.
Operating loss during the quarter was $2.2 million as compared to an operating income of $8.8 million in the fourth quarter of 2013.
Financial Condition
As of Dec 31, 2014, ReneSola had cash and cash equivalents plus restricted cash of $221.7 million, compared with $348.9 million as of Dec 31, 2013. Net cash inflow from operating activities was $48.8 million in the fourth quarter 2014 compared with net cash outflow of $29.5 million in the year-ago quarter. Total debt was $698.1 million as of Dec 31, 2014 compared with $742.6 million as of Dec 31, 2013.
Guidance
The company expects first quarter 2015 total revenues between $360 million and $380 million, with overall gross margin of 14%−16%. For 2015, revenues will likely fall in the range of $1.5 billion to $1.6 billion.
The company expects shipments to be lower in 2015 than in the prior year as it shifts its business model to multiple markets, focused on the residential and commercial sectors. It also has no plans to expand in-house production capacity in 2015.
Our Take
Solar panel manufacturers have been hit by anti-dumping duties and a fall in government subsidies in Europe. To avert the pitfalls, ReneSola reduced its exposure to the euro-denominated markets and shifted focus toward dollar-based and other non-euro markets in the fourth quarter.
As trade conflicts, primarily targeting Chinese solar manufacturers, heat up, ReneSola continues to emphasize its original equipment manufacturing (OEM) strategy. It is believed that the company will not find it difficult to continue its operations with low capital expenditure requirements despite regulatory uncertainties related to trading in the major solar markets, including the U.S., India and Australia. ReneSola has over 1 GW of outsourced capacity through OEM arrangements in key markets such as the U.S., India and Europe.
Peer Releases
Solar PV module manufacturer Trina Solar Ltd. TSL reported earnings of 21 cents per ADS in the fourth quarter of 2014, ahead of the Zacks Consensus Estimate by 50%.
JinkoSolar Holding Co., Ltd. JKS reported fourth-quarter 2014 non-GAAP earnings per ADS of 89 cents, below the Zacks Consensus Estimate of 90 cents by 1.1%.
First Solar Inc. FSLR reported adjusted fourth-quarter 2014 earnings of $1.89 per share, comfortably beating the Zacks Consensus Estimate by 145.5%.
Zacks Rank
ReneSola presently carries a Zacks Rank #2 (Buy). Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report TRINA SOLAR LTD (TSL): Free Stock Analysis Report FIRST SOLAR INC (FSLR): Free Stock Analysis Report RENESOLA LT-ADR (SOL): Free Stock Analysis Report JINKOSOLAR HLDG (JKS): Free Stock Analysis Report To read this article on Zacks.com click here.
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Trina Solar Ltd.
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CODE : TSL |
ISIN : US89628E1047 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Trina Solar is based in China. Trina Solar is listed in United States of America. Its market capitalisation is US$ 3.0 billions as of today (€ 2.8 billions). Its stock quote reached its highest recent level on April 22, 2016 at US$ 9.99, and its lowest recent point on January 16, 2018 at US$ 0.01. Trina Solar has 449 180 000 shares outstanding. |