Trina Solar (TSL) Beats On Record Shipments, Increasing Margins

Trina Solar (TSL) has posted strong earnings results this morning, beating analyst estimates by a decent margin.  The company posted .74/share on revenues of $313 million.  Analysts were looking for only .60/share on revenues of $283 million.  The quarter was a big improvement over the year ago period when the company reported just .26/share and also represents a nice bump sequentially.  Earnings increased about 15% and revenues 25% over last quarter.

The quarter was highlighted by record shipments and increasing margins.  The company shipped 164MW in solar modules during the quarter which was at the high end of their range and represents a nearly 200% increase over the year ago quarter.  For the full year 2009, the company nearly doubled shipments over 2008 to 399MW.  Gross margins came in at 32.6% which was well above the company’s previous guidance of 25 – 27%.

CEO Jifan Gao commented: “Our increased brand recognition and ongoing commitment to improving customer support in key areas resulted in the near doubling of our shipment volumes and a year-on-year revenue increase in 2009. Although significant ASP declines were felt across the industry, due to effective management and our strong execution capability, we achieved consistently healthy and expanding margins by streamlining our manufacturing processes, enhancing our supply chain, and implementing innovative technologies that improved our manufacturing efficiency.”

Looking ahead, the company expects the record shipments to continue.  They are looking to ship between 180 – 190MW of solar modules this quarter and close to 800MW for the year which be another doubling over the previous year. 

Shares of TSL are up about 4% in premarket trading, but technically the stock is still broken here, so I’m avoiding it on the long side.  I still feel like it needs to test the 200 day moving average around 18 which is where I’d be a buyer.

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