* Q2 profit $0.71/ADS vs Wall Street view $0.37
* Q2 revenue down 26.5 percent to $150 million
* Backs full-year shipment view, to expand capacity
* Shares up 1.9 pct in extended trade
(Adds details on capacity expansion, polysilicon price,
byline, updates share activity)
By Laura Isensee
LOS ANGELES, Aug 17 (Reuters) - Chinese solar company Trina
Solar Ltd (TSL.N) posted a quarterly profit on Monday that beat
Wall Street expectations thanks to lower prices on its key raw
material, polysilicon.
Shares rose 1.9 percent in extended trade after the company
also maintained its full-year shipments outlook and said it
would expand production capacity by the end of this year.
"The fact they reaffirmed guidance tells us the solar
market continues to rebound in line with the company's
expectations," said Raymond James analyst Pavel Molchanov.
Trina's rosy results marked a change from last week, when
Chinese solar companies JA Solar Holdings Co Ltd (JASO.O) and
LDK Solar Co Ltd (LDK.N) posted lackluster results and
Germany's Q-Cells AG (QCEG.DE) said it would cut a fifth of its
workforce as it is hit by a price slump in the industry.
Solar power companies have suffered this year as the credit
crisis and a pullback in incentives in Spain have led to a
global glut of solar panels, driving down prices and eroding
companies' profits.
One bright spot, however, has been the decline in the price
of polysilicon. On a call with analysts, Trina said that it
expected to reduce silicon costs by some 30 percent and to
compete with U.S.-based First Solar Inc (FSLR.O) on module
costs next year.
PROFIT TOPS STREET, REVENUE IN LINE
Changzhou, China-based Trina posted a second-quarter net
profit of $18.9 million, or 71 cents per American Depositary
share, compared with a net profit of $17.1 million, or 68 cents
per share, a year ago.
The company said that the combined effect of an accounts
receivable write-off and foreign currency exchange gain was
about 30 cents per ADS.
It was not immediately clear if those items were included
in the 37 cents a share analysts were expecting, according to
Reuters Estimates. However, even taking into account those
items, earnings were ahead of expectations.
Revenue fell 26.5 percent to $150 million, about in line
with analysts' estimates and the company's own forecast.
Trina said gross margins were 27.4 percent, compared with
23 percent in the second quarter of 2008.
The company expects to ship between 90 megawatts to 110 MW
of photovoltaic panels in the third quarter, up from 64 MW of
shipments in the second quarter.
For the full year 2009, the company repeated expectations
to ship between 350 MW and 400 MW of solar panels and to reduce
its manufacturing costs by 15 percent to 20 percent.
On a call with analysts, company executives said they saw
"market confidence" and detailed capacity expansion plans.
While the company had 400 MW of capacity at the end of June, it
will ramp up to 450 MW by the end of September and will reach
600 MW by the end of the year.
The company expects that its average selling price will
drop between 10 to 15 percent in the third quarter and a
further drop of 10 to 12 percent in the fourth quarter.
Trina's shares rose to $26.92 in extended trade after
closing at $26.42 on the New York Stock Exchange.
(Reporting by Laura Isensee and Nichola Groom, editing by
Robert MacMillan, Matthew Lewis and Bernard Orr)
Wang's comment came as the company returned to profit in the second quarter. Trina posted a net income of $18.9 million, or 71 cents per American depositary share, on $150 million in revenue. The Chinese company posted a loss of $10.6 million, or 42 cents per share, on a revenue of $132.1 million for the first quarter; and a net income of $17.1 million, or 68 cents per share, on a revenue of $204.2 million for the second quarter of 2008.
