Shares of ReneSola (SOL) were hammered yesterday, down nearly 17%, after the company reported strong earnings results, but weaker guidance than what the Street was expecting. The company reported another quarter of big quarter-over-quarter growth with an EPS of 0.69 on revenues of $386 million. That matched analyst estimates on the EPS side and beat estimates on the revenue side (analysts expected $366 million). However, traders sold the stock due to weak Q1 guidance. Analysts were looking for $342 million, but the company is forecasting $310-330 million in revenue. Was the 17% plunge justified? In my opinion, no. Once the dust clears, SOL may offer an outstanding entry point.
Here are some highlights of comments made by the CEO and CFO:
- SOL achieved a record ROE of 34.4% in 2010.
- It recorded record revenue of $1.2 billion in 2010.
- It lowered the non-silicon manufacturing cost to $0.24/watt.
- It expects to continue to lower its costs this year.
- It's looking to capture market share through capacity expansion.
- It expects increasing competition.
Shares of SOL plunged to an important level of support, right around that 200-day moving average. I wouldn’t be a buyer just yet, but if it can hold that level and begin to repair yesterday’s technical damage, it sure looks compelling down here.