What happened
Shares of solar energy stock Renesola (SOL 6.29%) jumped as much as 20.2% in trading on Wednesday after reporting first-quarter 2021 financial results. The stock rose throughout the day and is up 18.7% at 3:05 p.m. EDT.
So what
Quarterly revenue was $22.8 million, and net income was $774,000, or $0.01 per share. Analysts were only expecting $19.0 million in revenue and a loss of $0.02 per share, so results easily beat those expectations. Gross margin was an impressive 29.9% in the quarter.
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Outlook for the full year was unchanged with revenue expected to be $90 million to $100 million and gross margin over 25%. Second-quarter revenue is expected to be $19 million to $22 million with gross margin in the range of 36% to 39%.
Now what
The solar development business can be lumpy based on when projects are sold and what interest rates look like at the time. It looks like ReneSola is expecting to benefit from low rates and relatively high prices in the first half of 2021 with guidance indicating a sharp reduction in margins in the second half of the year.
For now, investors are overlooking that drop in margins later this year and cheering Q1 results, but keep in mind that ReneSola's profitability will be lumpy, and that's expected in the solar business.
