Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why ReneSola Earnings Still Won't Shine

ReneSola (NYSE: SOL  ) will release its quarterly report on Thursday, and as prospects in the solar industry overall have improved, the stock has enjoyed some extremely impressive gains. Yet ReneSola earnings are likely to show that the company has a long way to go before it can reached sustainable profitability, and it still has obstacles to overcome before investors should give the all-clear signal.

The Chinese solar industry has been under a huge amount of pressure lately, as harshly competitive conditions have led to an almost complete lack of pricing power and sustained losses for nearly all of the industry's players. ReneSola has been among those hardest hit, posting negative gross margins during the full 2012 year as well as the first quarter of this year. But can recently improved conditions help bail out the Chinese solar industry? Let's take an early look at what's been happening with ReneSola over the past quarter and what we're likely to see in its quarterly report.

Stats on ReneSola

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$367.73 million

Change From Year-Ago Revenue


Earnings Beats in Past Four Quarters


Source: Yahoo! Finance.

Is it time for ReneSola earnings to get sunnier?
Analysts have remained pessimistic about ReneSola earnings in recent months, having widened their loss estimates by $0.03 per share for the June quarter and by $0.17 per share for the full 2013 year. The stock, though, has climbed a whopping 140% just since early May.

In stark contrast to its share price, ReneSola's recent earnings results have been questionable at best. Even though the company managed to narrow its loss during the first quarter compared to year-ago levels, it still fell short of expectations as prices for solar panels dropped. Even calls for improved revenue during the second quarter weren't enough to keep the stock from plunging 13%.

Yet since then, a number of industrywide events have bolster prospects for solar companies throughout China. U.S. solar giant SunPower (NASDAQ: SPWR  ) gave improved guidance in its earnings report back in May, helping raise not only its own prospects but also those of its Chinese counterparts. More importantly, the Chinese government has committed to build more than 35 gigawatts of solar projects between now and 2015, essentially putting a floor underneath the Chinese solar market from the big ramp-up in demand.

ReneSola won a company-specific victory last month, when it made a 63-megawatt deal with Thailand's Energy Absolute to supply solar modules between this month and October. The deal adds to rising shipment volumes, although it still raises the question of whether increased sales at negative gross margins are actually an improvement.

Arguably the best news for the industry came when a potential solar trade war among the U.S., Europe, and China was resolved with relatively modest European tariffs on solar cells and price floors on solar modules, combined with Chinese tariffs on U.S. polysilicon. The tariff will help ReneSola and LDK Solar (NASDAQOTH: LDKYQ  ) because of their spare capacity to produce polysilicon. But China's move will actually hurt Chinese companies Yingli Green Energy (NYSE: YGE  ) and Trina Solar (NYSE: TSL  ) , with Yingli saying higher tariffs will raise overall costs and Trina needing to buy roughly half of its input polysilicon from outside sources.

In the ReneSola earnings report, watch to see whether the company will deliver on its guidance for increased shipment volume and revenue. Unless the company can figure out how to make a profit on its sales, it's hard to see ReneSola's stock going much higher in the long run.

Solar has real potential, but oil remains an important part of the world's energy picture. For investors who want to position themselves to profit from the return of $100 oil, our top analysts have prepared a free report that reveals three stocks that are bound to soar as oil prices climb higher. To discover the identities of these stocks instantly, access your free report by clicking here now.

Click here to add ReneSola to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 14, 2013, at 11:32 AM, jsIRA wrote:

    SOL already indicated that it Q2 gross margin will be in 11%-12% range, not negative.

  • Report this Comment On August 14, 2013, at 5:26 PM, solarfuture wrote:

    I have to wonder if Mr. Dan Caplinger even follows solar press releases let alone read the press releases of the solar company he decides to write about.

    Renesola raised its guidance on July 16 and increased gross margins to POSITIVE 5-6%, raised revenues, raised MWs, and raised 2013 guidance.

    I suggest in the future Mr. Dan Caplinger do a simple google search for the company he writes and read all the PR for the last 3 months before writing an article.

    Or better yet, maybe the editor could do some fact checking of his own before deciding to put a worthless garbage article like that under its banner.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2593505, ~/Articles/ArticleHandler.aspx, 9/30/2016 1:34:48 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,322.60 179.15 0.99%
S&P 500 2,169.19 18.06 0.84%
NASD 5,312.13 42.98 0.82%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 1:15 PM
SOL $1.04 Up +0.01 +0.97%
ReneSola CAPS Rating: *
LDKYQ $0.02 Up +0.00 +11.76%
LDK Solar Co., Ltd… CAPS Rating: *
SPWR $8.92 Down -0.11 -1.22%
SunPower CAPS Rating: ****
TSL $10.24 Down -0.03 -0.29%
Trina Solar CAPS Rating: **
YGE $3.79 Down -0.05 -1.30%
Yingli Green Energ… CAPS Rating: *