Trina Solar Swings Q2 Profit, Backs 2014 Shipment Outlook

(RTTNews) - Chinese solar panel maker Trina Solar Ltd. (TSL) reported Tuesday a profit in the second quarter compared to a loss last year, reflecting improved margins and revenue growth amid higher shipments on strong demand for panels in China, Japan and the U.S.

Earnings per share for the quarter matched analysts' expectations, while quarterly revenues missed their estimates. The company also reiterated its shipment guidance for the full-year 2014.

"Our global sales network and strong brand allow us to capitalize on commercial opportunities across the multiple markets where we have a presence, which has helped us to achieve strong sequential shipment growth in our core module business. At the same time, our growth strategy of focusing on developing our downstream business is progressing well," Chairman and CEO Jifan Gao said in a statement.

The Changzhou, China-based photovoltaic panel maker reported net income of $10.73 million or $0.14 per American Depositary Share or ADS for the second quarter, compared to a net loss of $33.65 million or $0.47 per ADS in the prior-year quarter.

On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.14 per ADS for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter increased 17.9 percent to $519.43 million from $440.73 million in the same quarter last year, but missed ten Wall Street analysts' consensus estimate of $562.35 million.

Total solar module shipments surged to 943.3 MW from 646.6 MW in the year-ago quarter. The company said 148.7 MW of this were shipped to its own downstream power plants in China and the UK, 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 China, Japan and the U.S.

The company said it continues to see robust demand for its products from the valued long-term customers in the U.S. on the basis of its established market position and superior product offerings. China also saw strong growth in demand for Trina Solar's products in the second quarter after a relatively weak first quarter.

Operating margin was 3.0 percent, compared to negative 5.4 percent last year, as gross margin expanded 380 basis points amid increased average selling prices, and a 460 basis points improvement in operating expenses as a percentage of total revenues.

Looking ahead to the third quarter, Trina Solar expects to ship between 1.06 GW to 1.12 GW of PV modules. For the fiscal 2014, the company continues to project total PV module shipments in the range of 3.6 GW to 3.8 GW.

"Looking ahead, we are optimistic that our growth will continue, particularly in our downstream business. We expect to see more DG projects come online in China throughout the remainder of 2014," Gao added.

The company noted that it recently raised $222.7 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 to capitalize on available growth opportunities. The proceeds will also provides additional flexibility to accelerate growth in downstream and strategically expand module production capacity.

In Tuesday's regular trading session, TSL is currently trading at $12.44, up $0.93 or 6.96% on a volume of 4.69 million shares.