Photovoltaic cells and modules maker Trina Solar Ltd. (TSL) reported Thursday its highest ever profit in the third quarter, helped by foreign exchange gains and increased gross margin on lower average silicon purchase prices. Revenues declined over 14%, despite an improvement in shipments. The company also provided shipment guidance for the fourth quarter and lifted the lower end of its shipment outlook range for the full year.
For the third quarter, net income rose to $40.11 million or $1.29 per American Depository Shares, or ADS, from $32.05 million or $1.17 per ADS in the previous year. The results of the latest quarter included a foreign exchange gain of $12.15 million, resulting from the appreciation of the Euro against the U.S. Dollar. The prior-year results included foreign exchange loss of $4.88 million.
On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.75 per ADS in the third quarter. Analysts' estimate typically excludes special items.
Net revenue for the quarter dropped 14.1% to $249.75 million from $290.72 million, reflecting lower module average selling prices. Twelve analysts were expecting revenue of $216.30 million in the third quarter.
For the three-month period, solar module shipments were around 123 MW, up 84.7% from the previous year.
Gross margin climbed to 28.5% from 22.4% and gross profit advanced year-over-year to $71.07 million from $65.19 million, mainly attributable to lower average silicon purchase prices.
Operating income dipped to $45.47 million from $46.79 million. Total operating expenses increased to $25.60 million from $18.40 million, as selling costs for the quarter rose to $8.29 million from $6.78 million, and general and administrative expenses increased to $15.83 million from $11.02 million in the comparable quarter of fiscal 2008.
Looking ahead, Gao, said, "We are seeing even stronger demand in the fourth quarter, reflecting increasing brand recognition for our products and a further improvement in financing conditions."
For the fourth quarter, the company foresees shipments to range between 145 MW and 165 MW of PV modules and expects gross margin of 25% - 27%. For the full year, Trina Solar expects total PV module shipments to range from 380 MW to 400 MW, compared to its earlier guidance of 350 MW - 400 MW.
TSL closed Wednesday's regular trading hours at $42.75 on the NYSE.
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