ReneSola Q1 Revenues Spike 59% on Cost Reductions (SOL)

On Thursday, ReneSola

reported first-quarter net revenues that climbed approximately 59% to $328.16 million from $206.55 million in the same period the year before. Net revenues were down from the $386.45 million in 4Q because of seasonal weakness, a decline in module shipments, and continuing uncertainty in Europe, especially Italy. ReneSola delivered a gross profit margin in 1Q of 30.7%, compared to the nearly identical figure of 30.9% in 4Q. In 1Q 2010, the gross profit margin for ReneSola was 17.1%. "Despite a relatively cautious market in terms of demand, we delivered a good set of results in the first quarter of 2011, especially in terms of gross profit margin and operating margin," said Mr. Xianshou Li, ReneSola's chief executive officer, in a corporate press release. "We have witnessed a sharp decline in module ASPs but wafer pricing held strong during the quarter and our cost-reduction efforts allowed us to maintain a healthy gross margin of 30.7%." Module shipments in 1Q were 86.9 MW compared to 15.4 MW in the same period the year before and 126.8 MW in 4Q. The company reiterated its full-year guidance in the conference call that followed the release of its earnings and said that the market would take off again once there was clarity in Europe. "Though we hold a cautious outlook for demand in Europe, particularly due to the uncertainty and policy changes in Italy, we will continue to build out our capacities and are confident in our ability to drive down costs and remain an industry leader in low-cost wafers," Mr. Xianshou Li said in the statement. Shares of ReneSola are down sharply today, trading down more than 7%.