ReneSola (SOL, Financial) recently reported good financial and operating numbers for the fourth-quarter 2014. Its continuous focus to provide renewable energy products and services to smaller-sized customers is driving its growth. Also, the recent investment in process technologies helped the company to improve the efficiency for its solar products, while decreasing its processing costs by 4% during the quarter.
The strong performance will continue
These factors are contributing to its performance. The company shipped nearly 488.4 megawatts modules for the quarter. In fact, its total quarterly module and wafer shipment accounted for 744.3 megawatts. This represents about 12.1% growth over the same quarter a year ago. ReneSola posted revenue of $387 million, beating consensus estimates of $355 million for the quarter. Its earnings beat analysts’ estimates by $0.05 per share for the fourth-quarter 2014.
ReneSola has made smart moves of late that should drive its growth going forward. Its increased shifts towards high margin downstream market is a wise decision. This should not only improve its margins but also turn out to be a growth catalyst for the company in the long-run.
It is also making significant technological progress on the other solar products such as double glass modules and micro inverters. Its double glass module has about 1500 volt maximum system voltage. The company plans to start production for its double glass modules in the near future that should contribute to its growth in the long-run.
The lower solar power cost is the main substance that is driving this huge demand for solar energy across the world. ReneSola is making the right moves by diversifying its products so as to better penetrate in this emergent markets. It is increasing its presences in the semi-conductor and system development businesses that should drive its growth in the future.
Ending remarks
ReneSola is making a turnaround. Its investment in the technology and innovation in products should deliver profits to shareholders in the coming years. The analysts expect its earnings to grow at CAGR of 15% for the next five years. This is quite reasonable considering the increasing competition in the industry. However, the stock has better earnings growth in the short-run. Its earnings are expected to grow 82.50% this year and 371.40% next year respectively. Its balance sheet carries total cash of $99.85 million and total debt of $792.73 million. The rising debt level will be a concern for ReneSola going forward.
