ReneSola to post loss in Q3: weak business conditions to last through Q1 next year

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Weak market demand and industry oversupply is to push ReneSola into making a loss for the third quarter, after providing revised financial guidance. Although ReneSola narrowed shipment guidance with only a 10MW drop over the previously guided lower range – margins of between a negative 3% and a negative 5% were projected on the back of declining ASPs and an inventory write-down of approximately US$19.4 million. Management said that the weak conditions were expected to last well into 2012.

“Weak market demand and industry oversupply continued to affect our business in the third quarter,” stated Xianshou Li, ReneSola's chief executive officer. “Our module business, in particular, was affected by Europe's challenging financing environment. While we expect product shipments to decrease slightly, we estimate lower revenues and depressed margins due to rapidly declining average selling prices throughout the solar supply chain. At this current time, we expect the challenging conditions in the global solar market to continue in the fourth quarter of this year, as well as into the first quarter of next year. We believe that conditions should improve later in 2012.”

ReneSola revised revenue to be in the range of US$185 million to US$195 million, compared to previous guidance of US$220 million to US$240 million.

Net income was expected to be in the range of negative US$7.5 million to negative US$8.5 million, due to convertible bond repurchases, according to the company.

ReneSola had withdrawn full-year guidance after reporting second quarter results.

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