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ReneSola's (SOL) Earnings & Revenues Beat Estimates in Q3

Zacks Equity Research

ReneSola Ltd. SOL reported earnings of 17 cents per American Depositary Share (ADS) from continuing operations in third-quarter 2019, which beat the Zacks Consensus Estimate of 5 cents.

Revenues

ReneSola’s third-quarter net revenues of $66 million surpassed the Zacks Consensus Estimate of $21 million. Moreover, the top line improved 247.4% from the prior-year quarter figure of $19 million.

The quarterly revenues exceeded the company’s projection of $55-$60 million. Revenues were primarily driven by the sale of the 55MW project development portfolio in Poland. Energy sales mainly stemmed from the 67.8 million KwH generated by rooftop DG projects in China.

Projects

As of Sep 30, 2019, ReneSola had more than 241 megawatts (MW) of rooftop projects in operation. Of this, the company operates 196.8 MW of rooftop projects in China, 15.4 MW in Romania, 24.1 MW in the United States and 4.3 MW in the U.K. As of September 30, 2019, the company had 15 MW of completed projects, which are currently for sale.

As of Sep 30, 2019, the company had a pipeline of almost 1.39 gigawatts projects in various stages. Of this, 714 MW are completed projects, while 399.2 MW are late-stage projects. Of these late-stage projects, 23.5 MW are under construction.

During the quarter, the company signed a sales agreement to sell DG projects with a combined capacity of 22.3 MW located in China.

Operational Highlights

The company generated gross margin of 24.6% that exceeded its guidance of 15-17%.

Operating expenses totaled $8.9 million in third-quarter 2019. Operating expenses in the quarter under review included an impairment charge of $5.5 million on the fixed assets related to the sale of the 15.3 MW of DG projects in China.

Operating income in the quarter came in at $7.4 million, up from the year-ago quarter’s operating income of $5.7 million.

Renesola Ltd. Price, Consensus and EPS Surprise

 

Renesola Ltd. Price, Consensus and EPS Surprise

Renesola Ltd. price-consensus-eps-surprise-chart | Renesola Ltd. Quote

Financial Condition

As of Sep 30, 2019, ReneSola had cash and cash equivalents of $9.4 million compared with $6.8 million as of Dec 31, 2018.

Long-term borrowings were $10.9 million as of Sep 30, 2019 compared with $41.4 million at the end of 2018.

Guidance

ReneSola expects fourth-quarter 2019 revenues in the band of $45-$50 million, with an overall gross margin of 10-15%.

For 2019, the company continues to anticipate revenues in the range of $130-$140 million, with an overall gross margin of 20-25%. The Zacks Consensus Estimate for ReneSola’s 2019 revenues is pegged at $104.8 million, which is currently below its projected guidance.

Zacks Rank

ReneSola currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Solar Releases

Enphase Energy, Inc. ENPH reported third-quarter 2019 adjusted earnings of 30 cents per share, which surpassed the Zacks Consensus Estimate of 25 cents by 20%. The bottom line also improved a massive 650% from 4 cents reported in the prior-year quarter.

First Solar Inc. FSLR reported third-quarter 2019 adjusted earnings of 29 cents per share, missing the Zacks Consensus Estimate of $1.06 by 72.6%. The reported number, however, improved from the prior-year quarter’s loss per share of 18 cents.

SolarEdge Technologies, Inc. SEDG reported third-quarter 2019 adjusted earnings of $1.21 cents per share, which surpassed the Zacks Consensus Estimate of 99 cents by 22.2%. The bottom line, moreover, rose 28.7% from 94 cents in the prior-year quarter.

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