Solar photovoltaic ("PV") module manufacturer Trina Solar Ltd.TSL reported earnings of 21 cents per American Depositary Shares ("ADS") in the third quarter of 2015, missing the Zacks Consensus Estimate of 29 cents by 27.6%. The reported figure also decreased by 38.2% from 34 cents per ADS earned in the year-ago quarter.
Trina Solar posted revenues of $792.6 million in the third quarter, up 28.5% year over year and 9.6% sequentially driven by higher shipment volumes to meet growing demand in China, the U.S. and emerging markets. The quarterly figure also surpassed the Zacks Consensus Estimate of $774 million by 2.4%.
Solar module shipments in the reported quarter totaled 1,703.2 megawatts ("MW") compared with 1,063.8 MW in the year-ago quarter and 1,231.6 MW in the previous quarter. This was attributable to increasing demand from prime geographical regions, like China, the U.S. and emerging markets.
Gross profit in the third quarter was $138.2 million, higher than $102.8 million a year ago but lower than $144.9 million in the previous quarter. Gross margin was 17.4% compared with 16.7% in the third quarter of 2014 and 20% in the second quarter of 2015. The sequential decrease in gross margin was mainly due to a faster rate of decline in average selling price in majority of the markets compared to the decline in the company's cost per watt. Additionally, a change in sales mix resulting from higher shipments to China and emerging markets such as India in the third quarter contributed to the margin downside. The year-over-year increase was primarily driven by greater annual decline in cost per watt compared to the company's average selling price. This was as a result of greater economies of scale along with an improvement in operational efficiency.
Total operating expenses were $132.3 million in the quarter, up 97.1% year over year and 57.2% sequentially.
Interest expense was $13.1 million, higher than $7.0 million incurred in the year-ago period and $12.4 million in the preceding quarter.
As of Sep 30, 2015, cash and cash equivalents were $486.1 million compared with $392.9 million as of Dec 31, 2014.
Long-term debt as of Sep 30, 2015 was $168.5 million compared with $22.4 million as of Dec 31, 2014.
Trina Solar expects fourth-quarter 2015 module shipment in the range of 1,500 MW to 1,650 MW. The company expects to connect 280 MW to 320 MW of PV projects to the grid in the fourth quarter of 2015.
For the full year, the company raised its guidance for total PV module shipments to the range of 5.5 gigawatts ("GW") to 5.6 GW from earlier guided range of 4.9 GW to 5.1 GW. The company also reiterated its plans to connect 700 MW to 750 MW downstream PV power projects to the grid across the world, including 30% to 40% of distributed generation projects in China.
Other Company Releases
JA Solar Holdings Co. Ltd. JASO posted third-quarter 2015 adjusted earnings of 68 cents per diluted ADS, surpassing the Zacks Consensus Estimate of 29 cents by an impressive 134.5% and the year-ago figure by 240%.
JinkoSolar Holding Co., Ltd. JKS posted third-quarter 2015 adjusted earnings of $1.04 per diluted ADS, surpassing the Zacks Consensus Estimate of 95 cents by 9.5%. However, it decreased by 23.5% from the year-ago figure.
ReneSola Ltd. SOL reported earnings of 8 cents per ADS in the third quarter of 2015. The Zacks Consensus Estimate was a loss of 5 cents. The company had reported a loss of 1 cent per ADS in both the preceding and year-ago quarters.
Trina Solar presently has a Zacks Rank #3 (Hold).
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