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Trina Solar (TSL) Beats on Q1 Earnings, Revenues Surge Y/Y
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Solar photovoltaic (“PV”) module manufacturer Trina Solar Ltd. (TSL - Free Report) reported earnings of 29 cents per American Depositary Shares (ADS) in the first quarter of 2016. The bottom line beat the Zacks Consensus Estimate of 23 cents by 26.1% and also surged 81.3% from 16 cents earned in the year-ago quarter.
Total Revenue
Trina Solar posted revenues of $816.9 million in the first quarter, up 46.4% year over year but down 15.1% sequentially. The year-over-year increase in revenues was primarily driven by higher shipment volumes in key markets in China, the U.S., and India. However, lower demand in Japan and Europe partially limited the upside. The sequential decrease was mainly due to seasonality. The quarterly figure surpassed the Zacks Consensus Estimate of $803 million by 1.7%.
Shipments
Solar module shipments in the reported quarter totaled 1,423.3 megawatts (“MW”) compared with 1,026.2 MW in the year-ago quarter and 1,776.3 MW in the previous quarter. This was attributable to increasing demand from prime geographical regions, like China, the U.S. and India.
Operational Update
Gross profit in the first quarter was $139.7 million. The reported figure was higher than $100.3 million a year ago but lower than $183.3 million in the previous quarter. The year-over-year increase was primarily driven by a faster rate of decline in average selling price in most markets compared with the decline in the company's cost per watt.
Gross margin was 17.1% compared with 18% in the first quarter of 2015 and 19.1% in the fourth quarter of 2015. The sequential decrease in gross margin was mainly due to a decline in average selling price on account of lower price in most markets. Also, lower downstream revenues, which have comparatively higher margins than the upstream module business, led to the deterioration in gross margin.
Total operating expenses were $94.9 million in the quarter, up 33.3% year over year but down 6.9% sequentially.
Interest expense was $15.1 million, higher than $10.7 million in the year-ago period and $13.2 million in the preceding quarter.
Financial Update
As of Mar 31, 2016, cash and cash equivalents were $452.3 million compared with $465.4 million as of Dec 31, 2015.
Long-term debt, excluding the current portion as of Mar 31, 2016, was $583.5 million. The company had long-term debt of $521.3 million as of Dec 31, 2015.
Guidance
Trina Solar expects second-quarter 2016 module shipment in the range of 1.50 gigawatts (GW) to 1.60 GW.
For the full year, the company reaffirmed its guidance for total PV module shipments to the range of 6.30 GW to 6.55 GW. The company updated its plans to connect 400 MW to 500 MW downstream PV power projects to the grid across the world from the previous guidance of 750 MW to 850 MW, including 15% to 20% of distributed generation projects in China.
First-Quarter Results of Other Companies
SunPower Corp. (SPWR - Free Report) reported first-quarter 2016 adjusted loss of 42 cents per share, wider than the Zacks Consensus Estimate of loss of 23 cents by 82.6%. In the year-ago quarter, the company had reported earnings of 5 cents per share.
First Solar Inc. (FSLR - Free Report) reported first-quarter 2016 earnings of $1.66 per share that handily beat the Zacks Consensus Estimate of 91 cents by 82.4%. The company also turned around from the prior-year loss of 61 cents on higher sales, gross profits, operating income and lower expenses.
SolarCity Corp. posted adjusted loss of $2.56 per share, much wider both the Zacks Consensus Estimate of a loss of $2.30 and the year-ago loss of $1.52. The wider loss can be attributed to the company’s rising expenses.
Zacks Rank
Trina Solar presently has a Zacks Rank #3 (Hold).
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Trina Solar (TSL) Beats on Q1 Earnings, Revenues Surge Y/Y
Solar photovoltaic (“PV”) module manufacturer Trina Solar Ltd. (TSL - Free Report) reported earnings of 29 cents per American Depositary Shares (ADS) in the first quarter of 2016. The bottom line beat the Zacks Consensus Estimate of 23 cents by 26.1% and also surged 81.3% from 16 cents earned in the year-ago quarter.
Total Revenue
Trina Solar posted revenues of $816.9 million in the first quarter, up 46.4% year over year but down 15.1% sequentially. The year-over-year increase in revenues was primarily driven by higher shipment volumes in key markets in China, the U.S., and India. However, lower demand in Japan and Europe partially limited the upside. The sequential decrease was mainly due to seasonality. The quarterly figure surpassed the Zacks Consensus Estimate of $803 million by 1.7%.
Shipments
Solar module shipments in the reported quarter totaled 1,423.3 megawatts (“MW”) compared with 1,026.2 MW in the year-ago quarter and 1,776.3 MW in the previous quarter. This was attributable to increasing demand from prime geographical regions, like China, the U.S. and India.
Operational Update
Gross profit in the first quarter was $139.7 million. The reported figure was higher than $100.3 million a year ago but lower than $183.3 million in the previous quarter. The year-over-year increase was primarily driven by a faster rate of decline in average selling price in most markets compared with the decline in the company's cost per watt.
Gross margin was 17.1% compared with 18% in the first quarter of 2015 and 19.1% in the fourth quarter of 2015. The sequential decrease in gross margin was mainly due to a decline in average selling price on account of lower price in most markets. Also, lower downstream revenues, which have comparatively higher margins than the upstream module business, led to the deterioration in gross margin.
Total operating expenses were $94.9 million in the quarter, up 33.3% year over year but down 6.9% sequentially.
Interest expense was $15.1 million, higher than $10.7 million in the year-ago period and $13.2 million in the preceding quarter.
Financial Update
As of Mar 31, 2016, cash and cash equivalents were $452.3 million compared with $465.4 million as of Dec 31, 2015.
Long-term debt, excluding the current portion as of Mar 31, 2016, was $583.5 million. The company had long-term debt of $521.3 million as of Dec 31, 2015.
Guidance
Trina Solar expects second-quarter 2016 module shipment in the range of 1.50 gigawatts (GW) to 1.60 GW.
For the full year, the company reaffirmed its guidance for total PV module shipments to the range of 6.30 GW to 6.55 GW. The company updated its plans to connect 400 MW to 500 MW downstream PV power projects to the grid across the world from the previous guidance of 750 MW to 850 MW, including 15% to 20% of distributed generation projects in China.
First-Quarter Results of Other Companies
SunPower Corp. (SPWR - Free Report) reported first-quarter 2016 adjusted loss of 42 cents per share, wider than the Zacks Consensus Estimate of loss of 23 cents by 82.6%. In the year-ago quarter, the company had reported earnings of 5 cents per share.
First Solar Inc. (FSLR - Free Report) reported first-quarter 2016 earnings of $1.66 per share that handily beat the Zacks Consensus Estimate of 91 cents by 82.4%. The company also turned around from the prior-year loss of 61 cents on higher sales, gross profits, operating income and lower expenses.
SolarCity Corp. posted adjusted loss of $2.56 per share, much wider both the Zacks Consensus Estimate of a loss of $2.30 and the year-ago loss of $1.52. The wider loss can be attributed to the company’s rising expenses.
Zacks Rank
Trina Solar presently has a Zacks Rank #3 (Hold).
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