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ReneSola (SOL) Beats on Q4 Earnings, Misses on Revenues

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ReneSola Ltd.’s (SOL - Free Report) shares dropped 8.9% on Mar 29, following its fourth-quarter 2020 results, thereby reflecting investors’ loss of confidence in this stock with both its top and bottom-line figures deteriorating on a year-over-year basis.

The company reported break-even earnings per American Depositary Share (ADS) from continuing operations on an adjusted basis in fourth-quarter 2020, which beat the Zacks Consensus Estimate of a loss of a penny. The company’s bottom line, however, deteriorated from earnings of 5 cents per ADS recorded in the prior-year quarter.

The company posted GAAP earnings of 5 cents in the reported quarter against loss of 23 cents reported in the fourth quarter of 2019.

The year-over-year improvement can be attributed to lower operating expenses incurred in the fourth quarter of 2020 compared to prior year quarter.

For 2020, the company reported adjusted earnings of 9 cents compared with 35 cents recorded during 2019.

Renesola Ltd. Price, Consensus and EPS Surprise

Renesola Ltd. Price, Consensus and EPS Surprise

Renesola Ltd. price-consensus-eps-surprise-chart | Renesola Ltd. Quote

Revenues

ReneSola’s fourth-quarter net revenues of $16.8 million missed the Zacks Consensus Estimate of $25 million by 31.8%. Moreover, the top line slumped 36.6% year over year. The quarterly revenues also missed the company’s revenue projection for the reported quarter, which was in the band of $23-$25 million.

For 2020, the company reported revenues worth $73.9 million, compared with $119.1 million recorded during 2019. The full-year revenue figure also fell short of the company’s guidance of $80-$100 million.

Projects

As of Dec 31, 2020, ReneSola had 173 megawatts (MW) of rooftop projects in operation. Of these, the company operates 149.2 MW of rooftop projects in China and 24.1 MW in the United States.

As of Dec 31, 2020, the company has completed 828 MW of projects. At the end of 2020, ReneSola had 1 gigawatt (GW) of late-stage projects.

Of these late-stage projects, 6 MW are currently under construction.

Operational Highlights

The company generated gross margin of 14.7% in the quarter ended December 2020 compared with the year-ago quarter’s 26.9%.

Operating expenses totaled $1.5 million, down 92.6% from $20.4 million witnessed in the year-earlier quarter.

Operating income in the October-December quarter came in at $0.96 million against the prior-year quarter’s operating loss of $13.3 million.

Financial Condition

As of Dec 31, 2020, ReneSola had cash and cash equivalents of $40.6 million compared with $24.3 million as of Dec 31, 2019.

Long-term borrowings were nil as of Dec 31, 2020 compared with $3.4 million as of Dec 31, 2019.

Net cash used in operating activities was $13.9 million at the end of 2020 compared with cash inflow of $55.9 million as of Dec 31, 2019.

Guidance

ReneSola expects first-quarter 2021 revenues of $18-$20 million, with gross margin in the range of 10-11%. The Zacks Consensus Estimate for first-quarter revenues is pegged at $24.6 million, higher than the company’s guided range.

For 2021, the company projects revenues in the range of $90-$100 million. Overall gross margin is expected to be more than 25%. The Zacks Consensus Estimate for 2021 revenues is pegged at $161.4 million, much higher than the company’s guided range.

Zacks Rank

ReneSola currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some Q4 Releases

Enphase Energy (ENPH - Free Report) reported fourth-quarter 2020 adjusted earnings of 51 cents per share, which surpassed the Zacks Consensus Estimate of 40 cents by 27.5%.

SolarEdge Technologies (SEDG - Free Report) reported fourth-quarter 2020 adjusted earnings of 98 cents per share, which surpassed the Zacks Consensus Estimate of 87 cents by 12.6%.

SunRun Inc. (RUN - Free Report) incurred fourth-quarter 2020 loss of 6 cents per share against the Zacks Consensus Estimate of earnings of 7 cents.

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