North Coast Solar Stocks

August 17, 2009

Trina profit tops estimates, co backs ’09 view

Filed under: TSL — Tags: , , , , , — Jason @ 6:16 pm

Mon Aug 17, 2009 6:16pm EDT

* Q2 profit $0.71/ADS vs Wall Street view $0.37

* Q2 revenue down 26.5 percent to $150 million

* Backs full-year shipment view, to expand capacity

* Shares up 1.4 pct in extended trade

LOS ANGELES, Aug 17 (Reuters) – Chinese solar company Trina Solar Ltd (TSL) posted a quarterly profit on Monday that beat Wall Street expectations thanks to lower prices on its key raw material, polysilicon.

Shares rose 1.4 percent in extended trade after the company also maintained its full-year shipments outlook and said it would expand production capacity by the end of this year.

“The fact they reaffirmed guidance tells us the solar market continues to rebound in line with the company’s expectations,” said Raymond James analyst Pavel Molchanov.

Solar power companies have suffered this year as the credit crisis and a pullback in incentives in Spain and Germany have led to a global glut of solar panels, driving down prices and eroding companies’ profits.

One bright spot, however, has been the decline in the price of polysilicon.

Changzhou, China-based Trina posted a second-quarter net profit of $18.9 million, or 71 cents per American Depositary share, compared with a net profit of $17.1 million or 68 cents per share, a year ago.

The company said that the combined effects of an accounts receivable write-off and foreign currency exchange gain, was about 30 cents per fully diluted ADS.

It was not immediately clear if those items were included in the 37 cents a share analysts were expecting, according to Reuters Estimates.

However, even taking into account those items, earnings were ahead of expectations.

Revenue fell 26.5 percent to $150 million, about in line with analysts’ estimates and the company’s own forecast.

Trina said gross margins were 27.4 percent, compared with 23 percent in the second quarter of 2008.

The company expects to ship between 90 megawatts to 110 MW of photovoltaic panels in the third quarter, up from 64 MW of shipments in the second quarter.

For the full year 2009, the company repeated expectations to ship between 350 MW and 400 MW of solar panels and to reduce its manufacturing costs by 15 percent to 20 percent.

Company chief executive Jifan Gao said in a statement that he sees “market confidence” returning to the photovoltaic sector due to government support and an improvement in financing conditions.

“With greater visibility and a pickup in demand in the market, we have therefore committed to capacity expansion by the end of the year,” Gao said.

Trina’s shares rose 1.4 percent to $26.79 in extended trade after closing at $26.42 on the New York Stock Exchange.

(Reporting by Laura Isensee, editing by Robert MacMillan and Matthew Lewis)

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