Solar photovoltaic (“PV”) module manufacturer Trina Solar Ltd. (TSL) reported earnings of 34 cents per American Depositary Shares (ADS) in the third quarter of 2014 compared with 14 cents per ADS in the year-ago quarter. With this the bottom line was ahead of the Zacks Consensus Estimate by a whopping 126.7%. The upside was driven by higher shipments.
Total Revenue
Trina Solar posted revenues of $616.8 million in the third quarter, up 12.5% from the prior-year quarter and 18.8% sequentially owing to higher shipment volume to meet growing demand from Japan and the U.S. Demand from the Asia-Pacific region at large remained robust. However, the quarterly figure missed the Zacks Consensus Estimate of $634 million by 2.8%.
Shipments
Solar module shipments in the reported quarter totaled 1,063.8 megawatts (“MW”), compared with 774.6 MW in the year-ago quarter and 943.3 MW in the second quarter 2014. This was attributable to increasing demand from prime geographical regions, mainly China, Japan and the U.S.
Operational Update
Gross profit in the third quarter was $102.8 million, higher than the year-ago gross profit of $83.4 million and $80.2 million in the last quarter. The increase primarily reflects changes in the sales mix with higher shipments to Japan, lower shipments to the U.S., and reduced in-house manufacturing costs as a result of greater economies of scale and improvements in operational efficiency.
Total operating expenses were $67.1 million in the quarter, down 13.2% year over year but up 4% sequentially.
Interest expense was $7 million, lower than $12 million incurred in the year-ago period and $8.1 million in the preceding quarter.
Financial Update
As of Sep 30, 2014, cash and restricted cash were $416.5 million compared with $561.4 million as of Dec 31, 2013.
Long-term debt as of Sep 30, 2014, increased to $103.6 million from $100.5 million as of Dec 31, 2013.
Guidance
Trina Solar lowered its 2014 module shipment forecast to 3.61–3.66 gigawatts (“GW”) from 3.6–3.8 GW, largely due to the cancellation of a 130-MW solar project in Inner Mongolia.
The cut weighed significantly on the share price as it lost about 5.2% on Nov 24, 2014.
Other Company Releases
China-based solar cell and module producer JA Solar Holdings Co. Ltd. (JASO) posted strong third-quarter 2014 results, reversing its year-ago loss as its shift to solar modules instead of cells paid off. The company recorded non-GAAP earnings of 21 cents per ADS in the third quarter of 2014, beating the Zacks Consensus Estimate of 15 cents by 40% and increasing 50% sequentially. In the year-ago period, it had incurred a loss of 36 cents per ADS.
JinkoSolar Holding Co., Ltd. (JKS) reported third-quarter 2014 non-GAAP earnings per ADS of $1.36 (non-GAAP earnings of 34 cents per share), well ahead of the Zacks Consensus Estimate of 71 cents by 91.5%. However, reported earnings were in line with the year-ago figure. The upbeat performance was primarily driven by higher revenues and a rise in total solar product shipments.
ReneSola Ltd. (SOL) is scheduled to release its third-quarter 2014 results on Nov 26, 2014. The Zacks Consensus Estimate is pegged at 5 cents per ADS.
Zacks Rank
The company presently holds a Zacks Rank #3 (Hold).
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