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ReneSola Increases Shipments But Still Delivers A Net Loss

August 30, 2012

With total wafer and module shipments increasing 8.1 percent sequentially and net revenues increasing 10.2 percent sequentially in Q2 2012, it appears that ReneSola (SOL :NYSE) is escaping the dark cloud that is hovering over most Chinese solar manufacturers. But is the way they are doing it going to interest investors?

Overall, investors should be pleased that ReneSola shipped 503.7 megawatts (MW) in Q2 2012, almost doubling its output from the same quarter in the previous year.

Net revenues for Q2 2012 were also strong as the company delivered $223 million, a 10.2 percent increase from the $211.5 million reported in the previous quarter.

But the higher shipments didn’t help the company return to profits as they recorded a net loss of $34.8 million, an improvement from the $40.2 million reported in the previous quarter. ReneSola reported a net profit of $1.8 million Q2 2011.

The lack of profits can be attributed to ReneSola’s commitment to growing their business at a time that could be called a solar recession.

Also hurting profits was the decrease in ReneSola’s average selling price per watt.  The $0.66 reported in Q2 2012 was an 11 percent drop from $0.74 in the previous quarter.

Helping investors forget the lack of profits might be the company’s outlook for Q3 2012. Solar wafer and module shipments expected to be between 510 MW and 530 MW. Unfortunately, lower selling price trend will continue as ReneSola is offering revenues of $200 to $220 million.

Shares of ReneSola were down 3.3 percent in afternoon trading.

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