ReneSola (SOL) reported a net loss for the fourth quarter compared to profit a year earlier as revenues of the solar energy company suffered severely from a decline in new projects and delay in the sale of completed projects. Meanwhile, the bottom line came in above analysts’ forecast and the company’s stock gained sharply in early trading Monday.
The China-based tech firm reported revenues of $5.6 million for the three-month period, which is sharply lower compared to the fourth quarter of 2017 and far below analysts’ forecast.
ReneSola reported a net loss of $4.34 million or $0.01 per share for the quarter, compared to profit of $1.7 million in the year-ago quarter. Adding to the weak bottom-line performance, operating expenses more than doubled to $4.76 million during the quarter.
Adding to the weakness in bottom-line performance, operating expenses more than doubled to $4.76 million during the quarter
For fiscal 2019, the management forecasts revenues from the project business to be between $150 million and $170 million, which is expected to result in overall gross margins of 20-25%. The estimate for first-quarter revenue is $8-$10 million and gross margin between 0% and 5%. Going forward, the cost-cutting initiatives, with focus on workforce reduction, will be continued.
The company said its asset sales in Hungary and Poland, which were expected to have completed last year, got delayed pending completion of due diligence. In the whole of 2018, about 27.2 MW of distributed-generation projects were connected in China, 58.4 MW of projects in Europe and 6.8 MW of projects in the US.
In a separate statement, ReneSola said it completed the sale of a 21-MW community solar portfolio to Nautilus Solar Energy, a solar project development and management company. The portfolio, spread over four sites, will be built through the remainder of the year and is expected to be online in the fourth quarter of the current fiscal year. The financial terms of the deal are not yet known.
Related: ReneSola Q3 2018 Earnings Conference Call Transcript
After falling to a six-year low in December last year, ReneSola shares entered the recovery path this year but traded far below their long-term average. The stock closed the last trading session notably higher and continued to gain in the early hours of Monday.