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


Solar photovoltaic (“PV”) module manufacturer Trina Solar Ltd. TSL 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%.


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 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 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 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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