NEW YORK (TheStreet) -- ReneSola (SOL) has lost a fifth of its share value on Thursday after announcing plans to shutter a polysilicon factory in Sichuan, China. The solar products manufacturer recorded an impairment charge of $202.8 million for its third quarter as a result.
The company said it had permanently ceased production at the Phase I plant after efforts to reduce production costs failed.
"We believe the discontinuation of production at the Phase I facility will help reduce our polysilicon production cost, in line with our efforts to achieve a target cost level that would make our in-house polysilicon production cost-efficient compared to the prevailing market price of polysilicon," said CEO Xianshou Li in a statement.
The China-based business also released its third-quarter earnings before the bell. Revenue of $419.3 million came in 11.1% higher than a year earlier and $59.4 million higher than analysts surveyed by Yahoo! Finance had anticipated. A loss of $1.12 a share was far wider than consensus of a 22-cent loss.
By mid-morning, shares had crashed 20.5% to $3.60. The stock is still up 133.1% since the beginning of the year.
TheStreet Ratings team rates ReneSola LTD as a Sell with a ratings score of D. The team has this to say about its recommendation:
"We rate ReneSola LTD (SOL) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins."