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 Ltd. (ADR) (NYSE: SOL ) fell as much as 10% in early trading after reporting earnings. Most of that loss was erased by mid-day.
So what: First quarter module shipments were 521.1 MW, which was up from 505.3 MW in Q4, and revenue fell 5% sequentially to $415.0 million. Net loss was $14.6 million, or $0.14 per share, which was worse than the $0.08 loss analysts expected.
Now what: Results were below expectations but just the fact that ReneSola isn't making money in a strong solar market is discouraging. The top companies in solar are now profitable and setting high expectations for the rest of the year. ReneSola's gross margin guidance of 12%-14% for the second quarter would be barely break-even. The company is slowly falling behind and with competitors beginning to invest in next generation manufacturing capacity I wouldn't be a buyer today.
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