Signs of a resurgence in its European market prompted Power-One to project better-than-expected second-quarter profits on May 3 even as it said that first-quarter income dropped 84.1 percent to $4.9 million, or 3 cents per diluted share.

Net sales were up 8.3 percent to $225.8 million. The company’s renewable energy division contributed $149 million to revenue, and its power products division added $77 million.

The bright second-quarter outlook comes after Power-One reported better-than-expected fourth-quarter earnings earlier this year, attributing growth in 2011 to its Asian and North American markets. The company’s shares, however, remained stuck in a rut due to economic woes in Europe, its largest market with about 75 percent of the company’s renewable energy sales.

“In the first quarter of 2012, Power-One was able to exceed its revenue guidance forecast as a result of higher demand for residential and commercial inverters in Europe,” CEO Richard Thompson said in an earnings statement.

“We anticipate these trends will continue into the second quarter as customers commission [photovoltaic] assets ahead of announced or expected reductions in subsidies.”

Strength in the photovoltaic market ahead of expected reductions in feed-in tariffs prompted the company to project strong demand in the second-quarter, it said. Power-One forecast revenue of between $240 million and $260 million next quarter, an increase of 6 percent to 15 percent over the first quarter.

In recent years, Power-One has grown to the No. 2 spot in the world as a supplier of solar-power inverters. Its share price dipped 0.5 to $4.43 after its earnings report.