Widening Net Loss Sends Shares of Trina Solar Lower

Andrew Klips |

Real Goods SolarSome solar companies have made stellar moves recently by beating Wall Street expectations, giving a broad lift to the industry players. Shares of Trina Solar Ltd. (TSL) had more than doubled in value in seven weeks, printing as high as $8.47 per share last week, marking the highest level in about 14 months.

On Wednesday, Changzhou, China-based Trina reported first quarter earnings and sales that came up short of analyst predictions as net loss widened, sending ADS shares lower in early trading. An ADS, or American Depositary Share, represents 50 of Trina’s ordinary shares.

For the quarter ended March 31, Trina reported net revenue of $260.2 million, down 25.6 percent from $349.88 million in the year prior quarter and 14 percent from the fourth quarter of 2012. Net loss for the quarter was $63.74 million, or 90 cents per share, compared to a net loss of $29.82 million, or 42 cents per share, in the year earlier quarter.

Wall Street was expecting a net loss of 71 cents per ADS and revenue of $295.8 million.

Citing a “lingering supply-demand imbalance” that is driving photovoltaic module prices lower, Jifan Gao, chairman and chief executive of Trina Solar, commented, "In this environment, we continue to focus on improving operational efficiency and exercising financial discipline.”

Cost of sales for Trina, the world’s third largest supplier of photovoltaic, or PV, modules decreased in the quarter to $255.8 million from $329.62 million last year. Total operating expenses were lower by 26 percent at $44.49 million in the latest quarter compared to Q1 2012.

Total shipments for the quarter increased from 380 MW in last year’s quarter to 392.6 MW this year.

Looking ahead, the company said it expects to ship between 500 MW to 530 MW of photovoltaic modules during the current quarter. It also reaffirmed its full-year outlook of shipments totaling between 2.0 GW and 2.1 GW of PV modules. Gross profit percentage growth for the second quarter is expected around middle single digits.

Some other Chinese solar companies got a boon in share value upon reporting quarterly earnings. Notably, JA Solar (JASO) shares roared ahead about 70 percent last Monday when it said its net loss shrunk to $32.9 million, or 85 cents per ADS, from $250.9 million the year earlier on a 4.7 percent increase in revenue to $1.68 billion. Analysts thought JASO would lose $1.20 per ADS in the recent quarter. JASO also offered an upbeat outlook for the quarter.

Yesterday, Canadian Solar Inc. (CSIQ) also got a lift after tightening its losses to $4.4 million, or 10 cents per share, from $21.3 million, or 49 cents per share, in the year prior quarter. Revenue declined less than expected with a 19 percent fall to $263.6 million. Wall Street was calling to a loss of 78 cents per share on revenue of $236.5 million.

The soft report for Trina has shares of TSL trading down by 8 percent at $6.21 shortly after Wednesday’s opening bell. Since hitting 52-week lows of $2.04 last November, shares have swelled by more than 200 percent, including today’s losses.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CLNYPRC Colony Capital Inc n/a n/a n/a 0
CSIQ Canadian Solar Inc. 14.12 0.51 3.75 2,809,596
JASO JA Solar Holdings Co. Ltd. 6.12 -0.01 -0.16 675,274
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 10.27 -0.17 -1.63 4,614,610

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