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ReneSola (SOL) Q4 Loss Wider than Expected, Shipments Down

Zacks Equity Research
Updated

ReneSola Ltd. SOL reported a loss of $1.26 per American Depositary Share (ADS) in the fourth quarter of 2016, wider than the Zacks Consensus Estimate of a loss of 80 cents. However, the company had reported earnings of 35 cents in the year-ago quarter.

For 2016, the company reported loss of $1.72 per ADS, wider than the Zacks Consensus Estimate of loss of $1.25. In 2015, the company had reported a loss of 25 cents.
 

Revenues

Moreover, ReneSola’s fourth-quarter net revenue of $232.1 million surpassed the Zacks Consensus Estimate of $223 million by 4.1%. Reported revenues deteriorated 21.7% year over year but improved 24.1% sequentially.

Management attributes the sales decline to lower module shipments to external customers due to weak market demand, and reduced combined average selling prices (ASP) as it strategically directed shipments toward downstream projects.

Full-year revenues came in at $929.8 million, down 27.5% from the year-ago figure of $1,282.0 million. However, the number surpassed the Zacks Consensus Estimate of $920.4 million.

Shipments

In the quarter under review, external module shipments were 330.7 megawatts (MW), down 11.4% year over year and grew 72.9% sequentially. Wafer shipments totaled 305.9 MW, up 13.2% year over year and 5.3% sequentially.

Operational Highlights

Gross margin of 2.1% in the quarter shrank 1390 basis points (bps) year over year and 800 bps sequentially. The sequential contraction was mainly due to lower wafer and module ASPs.

Operating expenses amounted to $26.8 million, down 12.1% from the prior-year quarter and 12.7% from the preceding quarter.

Operating loss during the quarter was $21.8 million. The company had reported operating income of $16.9 million in fourth-quarter 2015 and $11.9 million in third-quarter 2016.

Renesola Ltd. Price, Consensus and EPS Surprise

 

Renesola Ltd. Price, Consensus and EPS Surprise | Renesola Ltd. Quote

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Financial Condition

As of Dec 31, 2016, ReneSola had cash and cash equivalents plus restricted cash of $133.2 million, compared with $178.4 million as of Dec 31, 2015.

Net cash flow in operating activities in 2016 was $27.5 million, compared with cash inflow of $2.2 million in the year-ago period.

Total debt was $624.3 million as of Dec 31, 2016, down from $38.8 million as of Dec 31, 2015.

Guidance

The company expects first-quarter 2017 revenues of $130−$150 million with external wafer shipments in the range of 240 MW−260 MW and external module shipments in the range of 250 MW−260 MW.

For 2017, the company expects revenues in the band of $900−$1000 million

Peer Releases

JA Solar Holdings Co., Ltd. JASO posted fourth-quarter 2016 adjusted earnings of 98 cents per diluted American Depositary Share (ADS). The Zacks Consensus Estimate stood at a loss of 7 cents. Earnings improved 96% from 50 cents in the year-ago period.

JinkoSolar Holding Co., Ltd. JKS reported fourth-quarter 2016 non-GAAP earnings per American Depositary Share (ADS) of 88 cents, missing the Zacks Consensus Estimate of $1.33 by 33.8%. The reported figure also declined 62.4% from the year-ago quarter earnings of $2.34 per ADS.

Canadian Solar Inc. CSIQ reported fourth-quarter 2016 earnings of 24 cents per share, missing the Zacks Consensus Estimate of 29 cents by 17.2%. Reported earnings also plunged 77.1% from the year-ago tally of $1.05 per share.

Zacks Rank

ReneSola presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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JA Solar Holdings, Co., Ltd. (JASO): Free Stock Analysis Report
 
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Canadian Solar Inc. (CSIQ): Free Stock Analysis Report
 
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