Emeren Group Ltd’s SOL share price soared 5.9% to hit $1.96 on Aug 21 following the release of their most recent quarterly results.
Emeren’s income per American Depositary Share (“ADS”) in the second quarter of 2024 came in at a mere penny, missing the Zacks Consensus Estimate of 7 cents by a staggering 85.7%. This marks a significant decline of 92.9% from the 14 cents per share reported in the same quarter last year.
Revenue Performance
In the second quarter, Emeren reported net revenues of $30.1 million, marking an 11.2% decrease from the $33.9 million reported in the year-ago period. However, the figure exceeded the Zacks Consensus Estimate of $23 million by a notable 30.9%.
Projects and Developments
As of Jun 30, 2024, SOL had 264 megawatts of projects in operation across different regions, with a significant portion in Europe, the US, and China. Furthermore, Emeren strengthened its solar project pipeline, expanding it to an impressive 7,844 MW during the second quarter.
Operational Metrics
Operating expenses for Emeren amounted to $6.4 million during the quarter, showcasing a notable 15.7% year-over-year decrease. The company’s gross profit stood at $9.4 million, down from $12.7 million in the prior-year period. Operating income also declined to $3 million from $5 million in the corresponding quarter.
Financial Standing
As of Jun 30, 2024, Emeren held cash and cash equivalents totaling $50.8 million, a decrease from $70.2 million as of Dec 31, 2023. The company’s long-term debt saw a slight uptick, reaching $22.9 million compared to $22.7 million at the end of 2023. Cash outflow from operating activities also improved to $9 million from $26.1 million in the same period last year.
Future Projections
For the third quarter of 2024, Emeren anticipates revenues in the range of $25-$28 million, with a projected gross margin of 35-38%. However, the Zacks Consensus Estimate for 2024 sales slightly exceeds the mid-range of the company’s guidance.
Reaffirming its full-year guidance, Emeren expects revenues between $150-$160 million in 2024. The company also maintains its earnings per ADS guidance at 43 cents for the year, with a projected gross margin of 30%.
Emeren Group currently carries a Zacks Rank #4 (Sell).
Industry Comparison
Comparatively, in the solar sector, First Solar, Inc., FSLR, and Enphase Energy, Inc., ENPH, reported mixed results in the second quarter of 2024.
First Solar showed impressive growth in both earnings and net sales, surpassing estimates, while Enphase Energy experienced a decline in both metrics.
Nextracker Inc., NXT, also demonstrated strong earnings and revenue performance in the first quarter of fiscal 2025.