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UPDATE 2-ReneSola's revenue, margin forecast boosts shares
May 11, 2012 / 11:49 AM / in 6 years

UPDATE 2-ReneSola's revenue, margin forecast boosts shares

* Sees positive gross margins in Q2

* Sees Q2 rev $200-$220 mln vs est. $175.6 mln

* Q1 loss $0.47/ADS vs est. loss $0.31/ADS

* Q1 rev falls 41 pct

* Shares rise 11 pct before the bell

May 11 (Reuters) - Solar products maker ReneSola Ltd forecast current-quarter revenue ahead of analysts’ expectation and said gross margins will turn positive as costs fall on lower raw material prices.

The China-based company’s shares rose 11 percent to $1.99 in premarket trade on Friday.

ReneSola, which posted a wider-than-expected first-quarter loss on weak selling prices, expects revenue of $200 million to $220 million for the second quarter. Analysts on average were expecting $175.6 million, according to Thomson Reuters I/B/E/S.

The company was seeing improved demand in some European markets, particularly in Germany, a ReneSola executive said on a conference call.

Germany-based solar companies SMA Solar Technology and SolarWorld AG earlier this month posted better-than-expected profits on strong domestic demand.

ReneSola expects second-quarter gross margins to be positive as panel-making costs will fall more than 5 percent sequentially to 70 cents per watt, the company said.

In the first quarter, ReneSola’s profit margin improved to a negative 3.8 percent, from a negative 23.1 percent in the fourth quarter.

The company, which produces polysilicon, wafers and panels, expects total second-quarter shipments of 460 megawatts (MW) to 480 MW, compared with 466 MW in the first quarter.

First-quarter net loss was $40.2 million, or 47 cents per American Depository Share (ADS), compared with a profit of $43.3 million, or 49 cents per ADS, last year. Analysts were expecting a loss of 31 cents.

Revenue fell 41 percent to $211.5 million, but beat estimates of $177.6 million.

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