A continued decline in average selling prices (ASPs) in the third quarter has led China-based PV manufacturer, ReneSola to make an inventory write-down that will push gross margins deep into negative territory when the company reports Q3 2012 results on Friday, November 30.
Gross margin for Q2 2012 had been 0.6%, while Q1 gross margin had been negative 3.8%. However, ReneSola projected gross margin for Q3 would negative 17.5% to negative 18.5% due to a US$31.6 million inventory write-down.
Although total solar wafer and module shipments were said to be within its previously guided range of 510MW – 530MW, the company noted it had revised down full-year shipment guidance to be near 2.2GW, compared to a previously guided range of 2.2GW – 2.4GW.
ReneSola also said that solar module shipments would be slightly below its previously guided range of 150MW – 170MW, while revenue would be within the guided range of US$200 million – US$220 million for Q3.
Xianshou Li, ReneSola's chief executive officer said, “Although the challenging market conditions have affected our third quarter results, we have successfully transformed into a large-scale solar module supplier over the past year. Our module business has performed well in Europe and Australia, while at the same time capitalized on emerging opportunities in the United States and China.”
The CEO also noted that he expected module shipments in Q4 to increase significantly, compared with the current quarter, though did not say what was driving the expected increase.