ReneSola expects positive margins on higher shipments, lower costs
(Reuters) - ReneSola Ltd (SOL.N), one of the few U.S.-listed Chinese solar panel makers to have escaped steep import duties, said it expected margins to turn positive in the current quarter as it cuts selling costs and ships more wafers and modules.
The company's shares rose as much as 9 percent to $1.29 on the New York Stock Exchange on Friday.
ReneSola, which is not affected by steep tariffs imposed by the United States because it sources cells from outside of China, expects its solar wafer and module shipments to be between 635 megawatts (MW) and 675 MW in the quarter, much higher than the 532.8 MW it shipped in the third quarter.
The company said it expects to sell about 30 percent of its modules in China. Chinese solar companies are turning their attention to the lucrative business of building power plants, particularly in their domestic market, buoyed by the country's growing incentives for the industry.
RenSola forecast revenue of between $240 million and $260 million for the fourth quarter and said it expects average selling prices for modules to fall. Analysts were expecting revenue of $288 million, according to Thomson Reuters I/B/E/S.
The company said it expected module selling costs to fall to 57 cents per watt from 65 cents in the third quarter.
Solar companies are suffering from a fall in demand in Europe, their biggest market, as well as from excess supply caused by a rapid expansion of capacity, which have sent prices crashing and virtually erased margins.
ReneSola, which reported its fifth straight quarterly loss on Friday, said its third-quarter gross margin was negative 18 percent, including a $31.6 million inventory write-down.
Net loss widened to $78.6 million, or 91 cents per American Depositary Share (ADS), in the third quarter from $8.2 million, or 9 cents per ADS, a year earlier.
Revenue rose 15 percent to $218.2 million.
The company said it had 40 MW of projects under construction in China and 6 MW in Romania.
China Development Bank has indicated its support for the company's solar power projects, ReneSola said, although it has not yet found buyers for these projects.
ReneSola's shares were up 7 percent at $1.27 on the New York Stock Exchange on Friday afternoon. Its shares have fallen by about a fifth this year.
Shares of rivals Trina Solar Ltd (TSL.N) and Yingli Green Energy Holding Ltd (YGE.N), which have been hit by U.S. duties, have dropped more than 50 percent this year.
(Reporting By Vishal Krishnan Menon in Bangalore; Editing by Sriraj Kalluvila and Don Sebastian)
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