Solarfun Power (SOLF) got back in the black in a big way, reporting a Q3 EPS of $0.37 this morning, smashing analyst estimates of just .14/share.  Revenues were down over the year ago quarter but continue to improve sequentially at $144 million.

The company reported better diversity in the quarter with the new Czech solar market contributing 8% of shipments, but the company is still concentrated in Germany with 60% of its shipments there.  That’s an improvement from last quarter when 83% of its shipments went to Germany.

The company attributed the profitable quarter to not only increasing demand, but lower raw material costs as a result of renegotiated agreements and greater efficiencies in the manufacturing process.

Peter Xie, President of Solarfun, commented, “We are extremely pleased with the continued progress achieved in the third quarter of 2009. Of particular note were quarterly shipment volumes exceeding 100 MW for the first time in the Company’s history, gross margins reaching 20%, and a return to profitability. We also improved our capital structure by reducing short-term bank borrowings and raising additional equity capital.”

Looking ahead, the company sees Q4 shipments around 110MW and sees improvement in demand continuing in the first quarter of 2010.  The company targets shipment volume of 500MW for 2010 based on strong demand in Germany and new market opportunities in China and the US.

Shares of SOLF are up about 9% today and continue to carve out the right side of a new base.