Trina Solar Beats, Fails To Please (TSL)

Trina Solar Limited (NYSE: TSL) has just posted its quarterly earnings report.  The solar player posted net revenues increased to $120.7 million, up 183.6% year-over-year and 19.0% sequentially; while net income was $12.9 million and earnings per fully-diluted ADS was $0.51.  First call estimates were $0.48 EPS on $116.9 million in revenues.  Gross margin was 25.8% and Operating margin was 16.7%.  Solar module shipments were 29.49 MW, up 180.3% from 10.52 MW in the Q1-2007 and up 23.3% Q4-2007.

In the second Quarter the company expects to ship between 43 MW and 45 MW of PV modules and has revenues in the range of $169 million to $177 million with gross margin between 23% and 25% and estimates operating margin to be between 13.5% to 15%.  First Call’s revenues expectations are $168 million.

For fiscal-2008 it sees revenues in a range of $770 million to $808 million, with PV module shipments between 200 MW to 210 MW, with gross margin between 23% and 25% and believes operating margin between 15% to 17%.  First Call revenue expectations for the year are projected to be $756.46 million.

As of March 31, 2008, the Company had $38.2 million in cash and cash equivalents, which excludes the Company’s restricted cash balance of $126.0 million.  Trina has also noted that it has now secured approximately 95% of its estimated silicon feedstock requirements for 2008.

Trina Solar closed at $49.63 yesterday ahead of earnings, and and shares are indicated down almost $3.00 in very early pre-market trading.  Wall Street may be focusing on those gross margin numbers, or it may have just wanted to see much more compared to forward estimates.

Jon C. Ogg
June 6, 2008