ReneSola Ltd withdrew its full-year outlook because of a sharp drop in wafer and modules prices, and the China-based solar wafer producer forecast third-quarter revenue below Wall Street view, sending its shares down 4 percent before the bell.
“Both wafer and module prices fell faster than expected in the second quarter as European subsidy cuts weakened demand and led to oversupply,” Chief Executive Xianshou Li said in a statement.
The solar market likely bottomed in the second quarter after pullbacks in subsidies in Italy — the No. 2 solar market — stalled development of projects there this spring. This sparked a more than 20 percent drop in prices.
ReneSola’s views echoed that of other solar companies, including JA Solar Holdings Co Ltd, Trina Solar, MEMC Electronic Materials Inc, which said weak solar equipment prices have eaten into their profits.
Earlier this month, First Solar Inc cut its 2011 forecast as slack demand in Europe hit prices for its thin-film panels.
ReneSola’s American depositary shares (ADS) were trading at $2.64 cents before the bell on Tuesday. They had closed at $2.76 on Monday on the New York Stock Exchange. They have shed about 75 percent of their value in the last six months.
However, ReneSola expects total solar wafer and module shipments to be in the range of 330 MW-350 MW in the third quarter, up from 295.5 MW in the second quarter.
For the third quarter, the company expects revenue at $220-$240 million amid challenging market conditions.
Analysts, on average, were expecting of $264.6 million, according to Thomson Reuters I/B/E/S.
For April-June, the company posted a net profit attributable to common shareholders fell 95 percent to $1.8 million, or 2 cents per ADS. Revenue fell 2 percent to $249.3 million.
