Emeren Group Ltd’s SOL share price surged 5.9% to hit $1.96 on Aug 21 after the company’s latest quarterly report.
Emeren posted an income per American Depositary Share (“ADS”) of one cent for the second quarter of 2024, significantly missing the Zacks Consensus Estimate by 85.7%. This represents a steep decline of 92.9% from the year-ago quarter.
Performance of Revenues
Emeren’s second-quarter net revenues of $30.1 million decreased by 11.2% compared to the year-ago period. Despite the decline, the reported figure exceeded the Zacks Consensus Estimate by 30.9%.
Emeren Group Ltd. Sponsored ADR Price, Consensus and EPS Surprise
Emeren Group Ltd. Sponsored ADR price-consensus-eps-surprise-chart | Emeren Group Ltd. Sponsored ADR Quote
Update on Projects
By Jun 30, 2024, SOL had 264 megawatts of projects operational, spread across Europe, the United States, and China. The company further expanded its solar project pipeline to 7,844 MW during the second quarter.
Operational Insights
Emeren’s operating expenses in the reported quarter totaled $6.4 million, marking a 15.7% decrease year over year. The gross profit for the quarter stood at $9.4 million, down from $12.7 million in the prior year.
Operating income also declined to $3 million compared to $5 million in the same period last year.
Financial Standing
As of Jun 30, 2024, Emeren held cash and cash equivalents of $50.8 million, down from $70.2 million at the end of 2023. The company’s long-term debt increased to $22.9 million from $22.7 million during the same period.
Cash outflow from operating activities improved to $9 million in the second quarter of 2024 compared to $26.1 million in the corresponding period last year.
Future Outlook
For the third quarter of 2024, Emeren anticipates revenues ranging from $25-$28 million and a gross margin of 35-38%. The company reiterated its full-year revenue guidance of $150-$160 million.
Emeren also stands by its 2024 earnings per ADS estimate of 43 cents and a gross margin of 30% for the year.
Zacks Rank and Industry Comparisons
Emeren Group currently holds a Zacks Rank #4 (Sell). Comparatively, other solar companies like First Solar Inc., Enphase Energy Inc., and Nextracker Inc. have displayed varying financial performances in recent quarters.
Comparing with Industry Peers
First Solar reported robust earnings and exceeded revenue estimates in the second quarter of 2024. On the other hand, Enphase Energy’s earnings declined and revenues missed estimates. Nextracker Inc. showed impressive growth in both earnings and revenues in the first quarter of fiscal 2025.
