Chinese solar company Trina Solar (NYSE: TSL) reported on Friday that first quarter earnings doubled, beating analyst expectations. However, shares of the company’s stock slumped, due in part to projections of rising silicon costs and an overall downturn in the market following the release of Department of Labor statistics showing the unemployment rate increased to 5.5%.
Like other major solar companies, Trina Solar had a strong 1Q08 with total net revenues increasing to $120.7 million up 183.6% year-over-year and 19% sequentially.
Net income was $12.9 million, or $0.51 per share, compared to $4.8 million in 1Q07 and $15.7 million in 4Q07. Analysts’ average forecast was for earnings of $0.49 per share on revenue of $117.2 million, according to Reuters Estimates.
Nonetheless, the company’s stock lost nearly 10% to $44.67 per american depository share (ADS), before recovering slightly to $45.93 at Friday’s close. Trading opened at $45.65 Monday morning.
Net income of $12.9 million includes a foreign currency exchange lossof $4.0 million, primarily associated with the remeasurement of thenon-US dollar denominated obligations in the US dollar functionalcurrency.
Gross margin was 25.8%, compared to 22.3% in 1Q07
and 27.2% in 4Q07. Operating margin was 16.7%, compared to 10.5% in 1Q07 and 16.0% 4Q07
Contrary to analyst predictions that of a loosening silicon market, Trina Solar projected increasing silicon costs of 5% to 10% for 2Q08, the result of which, the company said will be a shrinking of margins by 3 percentage points.
In April Trina Solar announced long-term silicon supply agreements with Silfab S.p.A and GCL Silicon Technology Holdings.
About Trina Solar Limited
Trina Solar is currently one of the few PV manufacturers that has developed a vertically integrated business model from the production of monocrystalline and multicrystalline ingots, wafers and cells to the assembly of modules. Trina Solar’s solar modules provide electric power for residential, commercial, industrial and other applications worldwide.
Loading...