ReneSola Q1 Net Down 41% QoQ on 15% Lower Rev, FX Hedging Miss
ReneSola (NYSE:SOL) recorded net income of $43.33 million in the first quarter of 2011, down from $61.05 million in the fourth quarter of 2010 and representing diluted earnings per American depositary share of $0.49, the company announced April 28. Net revenues in the quarter were $328.2 million, in line with company guidance and representing a decrease of 15.1% from the previous quarter, as total shipments decreased 5.4% q-o-q to 330.4MW.
The company maintained gross margin at 30.7%, compared with 30.9% in the prior quarter, but recognized a $19.8 million loss in the fair value of foreign exchange forward contracts after the euro appreciated to a higher level than the forward rate hedged, compared to a gain of $10.1 million in the fourth quarter of 2010.
For the next quarter, ReneSola expects to record total shipments of between 330-350MW and revenues of $280 million to $300 million, citing uncertain market demand based on potential changes to national solar policies. The company will spend $350 million in 2011 on expanding wafer production capacity to 1.9GW from the current 1.3GW and raising module production output to 600 MW from its current 400MW capacity, as well as for expanding polysilicon production to 8,500MT from 3,500MT at present.