* Expects overall third-quarter gross margin in
* Cuts FY panel shipment view to 1.75-1.80 GW from 2-2.1 GW
* Second-quarter loss $1.30/ADS vs earnings of $0.17/ADS
* Net revenue down 40 pct at $346.1 mln
* Shares reverse course to trade up 7 pct
By Swetha Gopinath
Aug 21 Trina Solar Ltd cut its full-year
forecast for solar panel shipments and said it expects margins
to shrink further in the current quarter as prices continue to
plummet but shares rose as investors cheered the fall in
Margins have eroded and profits have disappeared at solar
companies as demand dropped in top market Europe and rapid
expansion in manufacturing capacity created a glut of panels,
sending prices plunging.
Trina Solar has been cutting processing costs to arrest the
steep fall in margins. Second-quarter non-silicon costs fell by
6 cents per watt from the preceding quarter.
The company said it continues to expect manufacturing costs
to fall in the third quarter from the second.
Trina Solar is setting itself up to be a low-cost producer
over the long term, said Avian Securities analyst Mark Bachman,
adding that the cost cuts were a positive for the stock.
Trina Solar shares, which fell 3.7 percent to $4.77 on the
New York Stock Exchange on Tuesday, reversed course to trade up
7 percent in afternoon trade.
However, the company expects the rate of decline in costs to
be lower than the fall in selling prices, an executive said on a
China-based Trina Solar, which reported its fourth straight
quarterly loss on Tuesday, expects overall gross margin for the
third quarter to be in "middle-single digits in percentage
terms." Overall gross margin was 19.6 percent in the second
Trina Solar's move to push up sales in emerging market
China, where companies need to sell products at lower prices, is
also expected to hurt margins.
"Margin guidance for the third quarter came in far below our
expectations, showing that margin pressures remain severe," said
Raymond James analyst Alex Morris.
Rival Canadian Solar Inc said last week that gross
margin would fall in the third quarter.
Chinese solar companies are also facing pressure in the
United States and Europe where they have been accused of
flooding the market with cheaper products.
Trina Solar, which is a sponsor of the Renault Formula One
Team, expects to ship between 1.75 gigawatts (GW) and 1.80 GW
modules this year, lower than its prior forecast of 2.0 GW to
Current-quarter module shipments are expected to be in the
range of 450 megawatt (MW) to 480 MW, higher than the 419 MW it
shipped in the second quarter.
The company reported a second-quarter net loss of $92.1
million, or $1.30 per American Depositary share (ADS), compared
with an income of $11.8 million, or 17 cents per ADS, a year
Net revenue fell 40 percent to $346.1 million.
Analysts on average had expected a loss of 79 cents per
share, on revenue of $393.9 million, according to Thomson
Trina Solar's shares have fallen 28 percent this year until
Monday, compared with a 16 percent fall in the WilderHill Clean
Energy index that also includes stocks of rivals First
Solar Inc and Suntech Power Holdings Co Ltd.