Trina Solar Q3 Results Miss Estimates, Narrows 2014 Shipment Outlook

(RTTNews) - Chinese solar panel maker Trina Solar Ltd. (TSL) reported Tuesday a profit in the third quarter that grew from last year, reflecting improved margins and revenue growth amid higher shipments on strong demand for panels in Japan, the U.S., and Asia-Pacific regions.

Both earnings per share and quarterly revenues missed analysts' expectations. The company also narrowed its shipment guidance range for the full-year 2014.

"Both our module and downstream project businesses delivered good results in the third quarter of 2014, demonstrating our commitment to consistent revenue and profit growth for our core businesses. Despite foreign exchange fluctuations and weaker demand in Europe, we continue to meet or exceed our financial and performance targets," Chairman and CEO Jifan Gao said in a statement.

The Changzhou, China-based photovoltaic panel maker reported net income of $11.49 million or $0.14 per American Depositary Share or ADS for the third quarter, compared to $9.90 million or $0.14 per ADS in the prior-year quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per ADS for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 12.5 percent to $616.84 million from $548.39 million in the same quarter last year, but missed ten Wall Street analysts' consensus estimate of $645.68 million.

Total solar module shipments increased to 1.06 GW from 774.6 MW in the year-ago quarter. The company said 127 MW of this were shipped to its own downstream power plants, on which revenues were not recognized.

The company attributed that year-over-year increase in shipments and revenues to rising shipment volumes due to growing demand from key geographical regions, particularly Japan and the U.S., as well as due to greater demand from the Asia-Pacific region.

The company noted that sales in new and emerging markets represented almost 15 percent of total shipments, demonstrating the success of its efforts to build a more comprehensive and diversified product distribution network covering more countries and regions.

Operating margin improved 470 basis points to 5.8 percent from last year's 1.1 percent, as gross margin expanded 150 basis points , and a 320 basis points improvement in operating expenses as a percentage of total revenues.

Looking ahead to the fourth quarter, Trina Solar expects to ship between 1.045 GW to 1.095 GW of PV modules. For the fiscal 2014, the company slightly narrowed its total PV module shipments guidance to a range of 3.61 GW to 3.66 GW from the prior forecast of 3.6 GW to 3.8 GW.

The company noted that it recently raised $138.9 million in net proceeds through a successful follow-on public offering of ADS and a concurrent offering of convertible senior notes to support growth initiatives and manufacturing capacity expansion for 2015.

TSL closed Friday's regular trading session at $10.93, up $0.13 on a volume of 4.75 million shares.