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Trina Solar (TSL) Tops Q3 Earnings Estimates, Revenues Lag

JASO TSL SOL JKS

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Solar photovoltaic (“PV”) module manufacturer Trina Solar Ltd. (TSL - Free Report) reported earnings of 18 cents per American Depositary Shares (ADS) in the third quarter of 2016, beating the Zacks Consensus Estimate of 16 cents by 12.5%. Quarterly earnings, however, tanked 14.3% from the year-ago number of 21 cents.

Total Revenue

Trina Solar posted revenues of $741.1 million in the third quarter, down 6.5% year over year and 22.9% sequentially. The sequential decrease was due to lower average selling prices (“ASP”) and lower shipments to China on account of rush orders before Jun 30 in expectation of a likely subsidy policy adjustment. The quarterly figure also missed the Zacks Consensus Estimate of $835 million by 11.2%.
 

 

Shipments

Solar module shipments in the reported quarter totaled 1,361.2 megawatts (“MW”), compared with 1,703.2 MW in the year-ago quarter and 1,658.3 MW in the previous quarter.

Operational Update

Gross profit in the third quarter was $125.6 million, down from $138.2 million a year ago and $176.3 million in the last quarter.

Gross margin was 16.9% compared with 17.4% in third-quarter 2015 and 18.3% in second-quarter 2016. Gross margin fell primarily due to a steeper decline in the ASP in most markets than the decline in the company's cost per watt.

Total operating expenses were $70.6 million in the quarter, down 46.6% year over year and 23.8% sequentially.

Interest expense was $29.1 million, higher than $13.5 million in the year-ago period and $26.0 million in the preceding quarter.

TRINA SOLAR LTD Price, Consensus and EPS Surprise

 

TRINA SOLAR LTD Price, Consensus and EPS Surprise | TRINA SOLAR LTD Quote

Financial Update

As of Sep 30, 2016, cash and cash equivalents were $456.0 million, compared with $465.4 million as of Dec 31, 2015.

Long-term debt, excluding the current portion as of Sep 30, 2016, was $649.1 million. The company had long-term debt of $521.3 million as of Dec 31, 2015.

Business Update

On Aug 1, 2016, Trina Solar entered into a definitive agreement and plan of merger. Under the agreement, the company will be acquired by an investor consortium in an all-cash transaction that represents an equity value of about $1.1 billion.

Peer Releases

JA Solar Holdings Co. Ltd. (JASO - Free Report) posted third-quarter 2016 adjusted earnings of 13 cents per diluted ADS, beating the Zacks Consensus Estimate of 3 cents by a wide margin. Earnings, however, deteriorated from the year-ago figure of 65 cents by 80%.

JinkoSolar Holding Co., Ltd. (JKS - Free Report) reported third-quarter 2016 non-GAAP earnings per ADS of $1.12, beating the Zacks Consensus Estimate of 84 cents by 33.3%. The reported figure, however, declined significantly from the year-ago quarter earnings of $3.12 per ADS.

An Upcoming Peer Release

ReneSola Ltd. (SOL - Free Report) is scheduled to report third-quarter 2016 results on Aug 29.

Zacks Rank

Trina Solar presently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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