ReneSola Ltd. (SOL) continued to deliver positive results from where it left off at the end of first-quarter 2010. On Thursday, the company provided some information on its unaudited results of second-quarter 2010 and also guided expectation for the second half of 2010, validating the upward trend.
The preliminary unaudited results of second-quarter 2010 provided by ReneSola are higher than the previously guided range and also show a sequential improvement. The strong demand for high-quality water products along with proper implementation of cost reduction programs helped in beating guidance.
Total solar product shipments in the second quarter are expected to be in the range of 250 megawatt (MW) to 260 MW. The results are expected to be higher than the previous guidance range of 230 MW to 250 MW and beat the first-quarter 2010 shipment of 242.4 MW.
ReneSola expects net revenue for second-quarter 2010 to be in the range of $245 million to $255 million, exceeding the previous guidance range of $230 million to $250 million and topping the first-quarter 2010 results of $206.6 million.
Gross margin is also expected to follow the upward curve, in the range of 28% to 30%, exceeding ReneSola's previous guidance range of 21% to 23% and beating the first-quarter 2010 margin of 17.1%.
2H10 Guidance
ReneSola expects the positive trend to continue in to the second half of the year, riding on the back of strong demand.
Total solar products shipment is expected to be in the range of 600 MW to 650 MW. Net revenue is expected to be in the range of $500 million to $570 million. Gross margin is expected to be between 28% and 30%.
The Zacks Consensus Estimate for second-quarter 2010 is 25 cents per share, for 2010 it is 93 cents per share, and for 2011 it is 90 cents per share.
Our View
The bullish pre-view of ReneSola’s second-quarter results, handsomely exceeding the guidance on strong demand and better cost controls, looks reassuring. The market reacted positively to the information and the shares of ReneSola closed at $6.48 per share, up 8.5% from the previous day’s close of $5.97 per share.
The positive catalysts for the company are its geographically-diversified customer base, ongoing expansion projects and a subsidy program in China. However, on the flip side, a tepid module demand in Europe, rising competition, credit risk from its customers and the company’s high Research and Development expenses will weigh on the stock in the near term. Hence, we maintain a Neutral rating with a short-term Zacks Rank #2 (Buy) on the stock.
Based in Jiashan, The Peoples Republic of China, ReneSola Ltd. engages in the manufacture and sale of solar wafers and related products. Its major competitors of ReneSola are LDK Solar Co. Ltd. (LDK) and MEMC Electronic Material Inc. (WFR).
Read the full analyst report on "SOL"
Read the full analyst report on "LDK"
Read the full analyst report on "WFR"
Zacks Investment Research
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Total solar product shipments in the second quarter are expected to be in the range of 250 megawatt (MW) to 260 MW. The results are expected to be higher than the previous guidance range of 230 MW to 250 MW and beat the first-quarter 2010 shipment of 242.4 MW.
ReneSola expects net revenue for second-quarter 2010 to be in the range of $245 million to $255 million, exceeding the previous guidance range of $230 million to $250 million and topping the first-quarter 2010 results of $206.6 million.
Gross margin is also expected to follow the upward curve, in the range of 28% to 30%, exceeding ReneSola's previous guidance range of 21% to 23% and beating the first-quarter 2010 margin of 17.1%.
2H10 Guidance
ReneSola expects the positive trend to continue in to the second half of the year, riding on the back of strong demand.
Total solar products shipment is expected to be in the range of 600 MW to 650 MW. Net revenue is expected to be in the range of $500 million to $570 million. Gross margin is expected to be between 28% and 30%.
The Zacks Consensus Estimate for second-quarter 2010 is 25 cents per share, for 2010 it is 93 cents per share, and for 2011 it is 90 cents per share.
Our View
The bullish pre-view of ReneSola’s second-quarter results, handsomely exceeding the guidance on strong demand and better cost controls, looks reassuring. The market reacted positively to the information and the shares of ReneSola closed at $6.48 per share, up 8.5% from the previous day’s close of $5.97 per share.
The positive catalysts for the company are its geographically-diversified customer base, ongoing expansion projects and a subsidy program in China. However, on the flip side, a tepid module demand in Europe, rising competition, credit risk from its customers and the company’s high Research and Development expenses will weigh on the stock in the near term. Hence, we maintain a Neutral rating with a short-term Zacks Rank #2 (Buy) on the stock.
Based in Jiashan, The Peoples Republic of China, ReneSola Ltd. engages in the manufacture and sale of solar wafers and related products. Its major competitors of ReneSola are LDK Solar Co. Ltd. (LDK) and MEMC Electronic Material Inc. (WFR).
Read the full analyst report on "SOL"
Read the full analyst report on "LDK"
Read the full analyst report on "WFR"
Zacks Investment Research
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