Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of solar manufacturer ReneSola (NYSE: SOL ) jumped as much as 26% today after the company increased guidance.
So what: Management said that second-quarter shipments would be 760 MW-770 MW, well above the previous expectation of 700 MW-720 MW. Gross margin is also expected to be 5%-6%, above the 3%-5% previously expected.
Now what: The solar industry is on fire and Chinese manufacturers are benefiting from increased sales around the world. The challenge is that even higher sales aren't leading to profits, as the low gross margin shows in the quarter. The caution is that profits may not materialize despite strong shipments, especially if European tariffs go through as planned in August. During the earnings release we'll find out if ReneSola can make enough money to make a profit, which would be the real indicator of a turn around.
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